Genius Group Must Sell Bitcoin Holdings Following US Court Order

Genius Group, a Singapore-based education and technology company, must sell its Bitcoin holdings following a US court order. The decision is part of its legal dispute

A US court has placed strict financial restrictions on Genius Group (NYSE:GENZ) following a complaint from two shareholders. The ruling, part of a broader legal dispute, may force the Singapore-based education and technology company to sell its Bitcoin holdings.

The American District Court for the Southern District of New York approved a preliminary injunction, preventing Genius Group from issuing shares or raising capital, according to a company filing on Wednesday.

The ruling stems from a complaint filed by two shareholders, Moe and Ritz, against Genius Group and its CEO, Roger James Hamilton. The complaint, filed in February 2025, centers on a collapsed agreement between Genius Group and Fatbrain AI.

Shareholders are alleging that Hamilton and another executive committed fraud to prevent the merger with Fatbrain AI. The complaint also led to an SEC investigation.

The complaint and subsequent TRO and PI may force Genius Group to sell its BTC holdings.

The complaint says that Moe and Ritz are accused of orchestrating a scheme to extort millions from Genius Group by misusing legal processes, including the TRO and PI. They filed for a TRO and PI on February 14, 2025, to prevent Genius from selling any shares, raising funds, or utilizing its $150 million ATM funding, specifically blocking the purchase of Bitcoin.

As a result, the court placed a temporary restraining order on Genius Group, blocking access to investor funds and forcing the company to begin selling its Bitcoin holdings.

Genius Group's BTC reserves have dropped from 440 BTC to 430 BTC, according to reports. If the legal battle continues, potential sales may follow.

Since the ruling, Genius' share price has dropped 53% from $0.47 to $22, and the Company’s market capitalization is currently 40% of the value of its Bitcoin Treasury.

Genius Group Bitcoin Pivot and Related Firms

Genius Group is one of the growing number of corporate institutions investing in Bitcoin. In November 2024, the Genius Group implemented a bold Bitcoin-first strategy, allocating Bitcoin as its treasury reserve asset.

Chief Executive Officer Roger James Hamilton has advocated for Bitcoin, positioning Genius Group as a Bitcoin-first company. The company adopted cryptocurrency as a financial strategy, borrowing MicroStrategy's BTC playbook.

Earlier, it approved a $33 million rights offering to buy BTC. However, the court order may force it to change its approach to Bitcoin acquisition.

Firms like Strategy, Metaplanet, and Tesla have added Bitcoin to their balance sheets, seeing it as a hedge against inflation and economic uncertainty. Strategy has been more aggressive with its Bitcoin acquisition campaign. Recently, MicroStrategy (NASDAQ:MSTR) acquired 22,048 BTC for $1.92 billion at an average price of $86,969 per Bitcoin.

Should Pro-Bitcoin Firms be Concerned?

Meanwhile, the legal case against Genius Group raises concerns for other companies holding Bitcoin.

While firms like MicroStrategy continue to accumulate Bitcoin, Genius Group’s case shows the legal risks involved. Many experts believe that as long as an organization adheres to the stipulated guidelines set by the authorities, there is nothing to fear regarding lawsuits.

While this may not have been the case with the previous administration, the current US SEC leadership has maintained a largely pro-crypto stance.