Singapore-based AI company, Genius Group, is presently restricted from expanding its Bitcoin treasury. This limitation is backed by a US court order that prohibits the firm from selling shares, raising funds, and using the respective funds to buy more Bitcoin. This development is tied to wider issues relating to a bitter merger with Fatbrain AI that occurred in October of the previous year.
On March 13, a New York District court implemented a temporary restraining order (TRO) and a preliminary injunction (PI) concerning the feud surrounding the Genius Group and Fatbrain AI merger. As documented by the Genius Group’s April 3 statement, the merger and acquisition agreement meeting held in March 2024 went awry by October 30th, leading Genius to initiate the process of termination on grounds of alleged fraud by Fatbrain AI executives.
February saw Fatbrain AI executives Peter Ritz and Michael Moe filing for a permanent injunction and the TRO, which essentially places a blockade on the Genius Group from buying more Bitcoin, selling its shares, and raising funds until the arbitration verdict is passed. Due to the injunction, the Genius Group had to shut down some divisions, suspend marketing operations, and sell 10 Bitcoin from its total of 440, which is valued over $23 million, to sustain its operational activities.
Although Genius Group is making every possible effort to reduce Bitcoin sales, it anticipates that it may need to reduce its Bitcoin treasury over the coming months if the PI stays in effect. Additional lawsuits have been filed by Fatbrain AI shareholders against Fatbrain AI executives, and Genius Group claiming that federal securities laws were violated concerning the merger.
Complaints lodged against Fatbrain AI allege that fraudulent conduct took place during the merger, scamming shareholders out of $30 million. As of February 14, Genius Group was voluntarily excluded from the legal actions. Furthermore, Genius Group maintains that the US court injunction is forcing it to contravene Singapore law by halting share compensation as part of employee agreements.
Genius Group announced in November 2024 its steps to create a Bitcoin treasury with a purchase of 110 Bitcoin for $10 million. Although banned from expanding its treasury, the firm pledges to “continue to fly the flag for Bitcoin.” Genius Group’s share price has fallen 9.80% in the last trading session to $0.23. Since hitting a record high of over $96 in June 2022, it has lost over 99% of its value.