U.S. Court Order: Genius Group Banned From Buying Bitcoin

Singapore-based AI firm Genius Group hit a hard rock in developing a Bitcoin reserve. A recent order from the U.S. court stumped Genius Group’s future crypto plans. It banned the company from increasing shares or using investor money to buy Bitcoins. This ban is mainly due to the dispute over the merger with Fatbrain AI.

U.S. Court Issues Injunction Blocking Key Business Activities

The legal trouble began when the New York District Court issued a preliminary injunction (PI) and temporary restraining order (TRO) on March 13. These orders stop Genius Group from selling shares, raising capital, and expanding its Bitcoin treasury, activities the company had been heavily focused on. 

A Disputed Merger and Fraud Allegations

Genius Group and Fatbrain AI completed their merger and purchase agreement in March 2024. However, just months later, Genius initiated arbitration proceedings to cancel the deal, accusing Fatbrain AI executives of fraud. In response, Michael Moe and Peter Ritz, key figures at Fatbrain AI, filed for the TRO and a permanent injunction in February. The goal was to prevent Genius Group from moving money or stock around while the arbitration played out.

Bitcoin Treasury Plans on Hold

Before the legal battle, Genius Group had big plans for its Bitcoin strategy. Back in November 2024, it had bought 110 Bitcoin for $10 million and aimed to hold 90% or more of its reserves in Bitcoin, targeting a whopping $120 million in BTC. This bold move even caused the company’s stock price to rise 66%.

Now, because of the injunction, Genius Group has had to shut down divisions, pause marketing, and even sell 10 Bitcoin from its stash of 440. That sale helped keep operations going, but the company has warned that more Bitcoin sales may follow if the PI stays in place.

Legal Conflict Across Borders

The court order doesn’t just affect Genius Group financially, it’s also putting the company in a tough spot legally. According to CEO Roger James Hamilton, obeying the U.S. order has forced the company to violate Singapore law by freezing employee share compensation, which is part of their employment agreements. He expressed surprise and concern, stating, “We never dreamed that it was possible that a US court could block the company from being able to issue shares, raise funds, or buy Bitcoin.”

Still, Hamilton remains committed to Bitcoin, adding that Genius Group will “continue to fly the flag for Bitcoin,” despite being legally restricted from building its treasury further.

Shareholder Lawsuits Add More Pressure

Adding fuel to the fire, shareholders of Fatbrain AI filed two lawsuits in April 2024 against Moe, Ritz, and Genius Group itself. These suits accuse them of violating federal securities laws connected to the merger. With legal issues piling up, the company’s stock price has taken a hit, falling 9.80% to $0.23, with a further drop to $0.22 after hours. That’s a steep fall from its peak of over $96 in June 2022.

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