Genius Group Faces Bitcoin Ban Amid Legal Turmoil with Fatbrain AI

A Bitcoin Dream Derailed

Genius Group, a Singapore-based artificial intelligence company, has hit a major roadblock in its ambitious “Bitcoin-first” strategy. On March 13, 2025, the U.S. District Court for the Southern District of New York issued a preliminary injunction (PI) and temporary restraining order (TRO), prohibiting the firm from expanding its Bitcoin treasury, selling shares, or raising funds. The ruling, announced by Genius Group on April 3, stems from a contentious fallout with Fatbrain AI, derailing its plans to amass a $120 million Bitcoin reserve. With its stock price cratering and operations in jeopardy, the firm now faces an uncertain future.

Source: Roger James Hamilton

The Fatbrain AI Fiasco

The legal saga traces back to a merger between Genius Group and Fatbrain AI, finalized in March 2024. Initially hailed as a strategic union to bolster AI-driven education, the deal soured by October 30, when Genius initiated arbitration to terminate the Asset Purchase Agreement, alleging fraud by Fatbrain AI executives Michael Moe and Peter Ritz. Tensions escalated in February 2025, when Moe and Ritz secured the TRO and PI, blocking Genius from key financial maneuvers until the arbitration concludes. Fatbrain AI shareholders further muddied the waters, filing lawsuits in April 2024 against both companies’ leadership for alleged securities law violations tied to the merger—though Genius was dismissed from those suits on February 14, 2025.

Fatbrain AI did not respond to requests for comment, leaving the dispute’s full scope shrouded in uncertainty.

Bitcoin Sales and Operational Strain

The injunction has forced Genius Group into a corner. Unable to tap its $150 million at-the-market funding or issue shares, the firm has sold 10 Bitcoin (BTC, $82,865) from its 440-coin stash—worth over $23 million—to keep operations afloat. “Genius is taking all necessary measures to minimize Bitcoin sales but anticipates further downsizing of its Bitcoin Treasury if the PI persists,” the company warned in its April 3 statement. Divisions have shuttered, marketing efforts have stalled, and the firm hints at more cuts ahead, painting a grim picture of its financial health.

Two shareholder lawsuits against Fatbrain AI alleged conduct during the merger was fraudulent, which defrauded shareholders of $30 million. Source: ASX Law

Caught Between Laws

Adding insult to injury, Genius claims the U.S. court order has pushed it into a legal bind with Singaporean law. The injunction halts share-based compensation for employees—a standard part of its employment agreements—forcing the company to violate local regulations. “We never dreamed a U.S. court could block us from issuing shares, raising funds, or buying Bitcoin—decisions typically left to a public company’s shareholders or board,” said CEO Roger James Hamilton. Despite the setback, Hamilton remains defiant, vowing to “continue to fly the flag for Bitcoin” even under these constraints.

From Bitcoin Ambition to Stock Collapse

Genius Group’s Bitcoin journey began with fanfare in November 2024, when it snapped up 110 BTC for $10 million, aiming to hold 90% of its reserves in the cryptocurrency. The announcement sparked a 66% stock surge, reflecting investor optimism. But that high—peaking at over $96 in June 2022—feels like a distant memory. As of April 4, 2025, the stock has shed over 99% of its value, closing at $0.23 after a 9.80% drop in the last session, with a further 3.74% decline to $0.22 after hours, per Google Finance data. The court’s restrictions have only accelerated this freefall, leaving shareholders reeling.

A Fight for Survival

Genius Group isn’t going down without a fight. The firm has filed an emergency motion with the U.S. Court of Appeals for the Second Circuit to overturn the injunction, arguing it was secured through “false statements” by Fatbrain AI executives. It also submitted a transcript of a February 27 meeting with Ritz, alleging he outlined a scheme to exploit the legal process for financial gain—a claim now part of a separate Florida lawsuit by Fatbrain shareholders. As arbitration looms, Genius faces a dual battle: preserving its Bitcoin vision and stabilizing a company on the brink.

Genius Group’s share price went down during the last trading session and after the bell. Source: Google Finance 

What’s Next?

The outcome of this legal tangle could reshape Genius Group’s trajectory—and its bold Bitcoin strategy. For now, the firm is a cautionary tale of how corporate disputes can upend even the most forward-thinking plans. With its treasury under pressure and its stock in tatters, Genius must navigate uncharted waters, balancing survival with its crypto convictions. Whether it can reclaim its footing remains an open question in a saga that’s far from over.

This rewrite sharpens the narrative, enhances flow, and frames the story as a high-stakes drama with broader implications. It integrates all key details—legal disputes, Bitcoin sales, stock performance—into a cohesive, engaging article while spotlighting Genius Group’s resilience and the stakes at play. Let me know if you’d like further adjustments!