Genius Group, a Singapore-based education technology firm focused on AI and blockchain, has been forced to sell a portion of its Bitcoin holdings following a U.S. federal court order that restricted its access to funding and financial operations.
The U.S. District Court for the Southern District of New York issued a preliminary injunction on March 13, effectively blocking the company from issuing shares, raising capital through its $150 million at-the-market funding program, or acquiring additional Bitcoin. The ruling has disrupted Genius Group’s Bitcoin-first treasury strategy, prompting it to sell 10 BTC—reducing its holdings from 440 to 430 Bitcoin—to maintain operations.
Legal Dispute Rooted in Terminated Fatbrain AI Deal
The ongoing legal complications stem from Genius Group’s attempt to exit an Asset Purchase Agreement (APA) with Fatbrain AI, a deal that has since spiraled into multiple lawsuits and regulatory scrutiny.
After initiating arbitration to terminate the APA in October 2024, Genius Group and Fatbrain agreed to a court-monitored injunction in December. However, Fatbrain AI shareholders later sued both companies, and also brought claims against executives Michael Moe and Peter Ritz, alleging fraudulent conduct related to the APA.
Adding to the turmoil, the U.S. Securities and Exchange Commission (SEC) has reportedly filed fraud-related allegations against Fatbrain AI. In response, Moe and Ritz filed for a Temporary Restraining Order (TRO) and the preliminary injunction—both of which were granted, effectively freezing Genius Group’s access to essential financial tools.
Genius Group Fights Back
Genius Group has labeled the court order as unjust and based on “false statements.” The company has filed motions to lift the restrictions and submitted a transcript from a meeting with Peter Ritz, alleging he discussed plans to leverage the court injunction for financial gain. According to the company, this same transcript is also being used by Fatbrain shareholders in their lawsuit against Moe and Ritz in Florida.
CEO Roger James Hamilton expressed disbelief over the court’s ability to override decisions normally governed by corporate governance.
“We never dreamed that it was possible that a U.S. court could block the company from being able to issue shares, raise funds or buy Bitcoin – all actions that would normally be decided by a public company’s shareholders or Board,” Hamilton said.
He added,
“We will not bend to fraudsters and market manipulators that are themselves the subject of multiple lawsuits for fraud and misconduct.”
Operational and Financial Fallout
As a result of the injunction, Genius Group has been forced to cut costs, shut down divisions, halt sponsorships, freeze marketing efforts, and suspend investments. The company has also ceased share-based employee compensation, which it says may violate Singapore’s labor regulations.
Since the restraining order was issued in February, Genius Group’s share price has plummeted by 53%, and its market capitalization has dropped to just 40% of the value of its Bitcoin Treasury.
The company has now filed an emergency appeal with the U.S. Court of Appeals for the Second Circuit, seeking to overturn the injunction.
Commitment to Bitcoin Remains
Despite these setbacks, Genius Group remains committed to its Bitcoin-first treasury strategy, which it adopted in November 2024. The firm still views Bitcoin as a long-term store of value and reiterated its intent to hold the digital asset as its primary reserve.
The case now hinges on the outcome of the appeal, which could determine not only Genius Group’s financial future but also raise questions about the extent of judicial influence over corporate treasury strategies in the digital asset era.
