Singapore AI Company Genius Group Barred from Expanding Bitcoin Reserves

The company announced on April 3 that a New York District Court issued a preliminary injunction (PI) and temporary restraining order (TRO) on March 13, restricting it from selling shares, raising capital, or using investor funds to purchase additional Bitcoin.

Singapore-based artificial intelligence company Genius Group has been temporarily barred by a U.S. court from expanding its Bitcoin reserves.

The company announced on April 3 that a New York District Court issued a preliminary injunction (PI) and temporary restraining order (TRO) on March 13, restricting Genius Group from selling shares, raising capital, or using investor funds to purchase additional Bitcoin.

The ruling, linked to a merger and purchase agreement finalized by the two firms in March 2024, comes amid an ongoing legal dispute between Genius Group and Fatbrain AI.

After merging in a deal valued at $86 million, the two firms planned to integrate their operations and streamline administrative tasks. However, both parties encountered difficulties, leading Genius Group to seek arbitration to terminate the merger by October 30.

In its request, Genius Group alleged fraudulent conduct by Fatbrain AI executives.

Later, in February, two executives from Fatbrain AI — Michael Moe and Peter Ritz — applied for the TRO and injunction, aiming to freeze Genius Group’s actions until the arbitration is concluded.

The restrictions imposed on the company include limitations on selling shares or raising capital, directly impacting the company's ability to expand its treasury and conduct routine corporate activities.

The TRO and PI also prevent Genius Group from using investor funds to buy more Bitcoin, an initiative that the company’s board and shareholders had approved.

"Genius is taking all necessary measures to minimize Bitcoin sales and adjust its operations in response to the court's order. The company may need to further downsize its treasury in the coming months as it continues to adapt to the evolving legal situation," the statement concluded.

The legal conflict has also led to further lawsuits. In April 2024, shareholders of Fatbrain AI filed two lawsuits against both Genius Group and Fatbrain executives, accusing them of violating federal securities laws. However, Genius Group was voluntarily dismissed from these suits in February.

In a surprising turn, Genius claims the U.S. court order is causing it to breach Singaporean law by preventing it from issuing shares promised to employees as part of compensation agreements.

"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 rather than a court."

Despite the setbacks, Hamilton remains optimistic about the company's Bitcoin strategy.

"We will continue to fly the flag for Bitcoin and adjust our operations to comply with the court's decision. We are committed to adapting to these challenges and emerging stronger from them," he added.

Genius Group first began building its Bitcoin treasury in November 2024, kicking off the year with a purchase of 110 BTC for $10 million.

The company has publicly committed to holding 90% or more of its reserves in Bitcoin, aiming for a treasury of $120 million. This strategy once sent its stock soaring by 66%.

However, shares have since plummeted, closing down nearly 10% on Wednesday to $0.23 and falling further after hours. From a peak of over $96 in June 2022, the stock has now lost more than 99% of its value.