Singapore-based synthetic intelligence agency Genius Group says it’s quickly barred from increasing its Bitcoin treasury after a US court docket order has banned it from promoting shares, elevating funds and utilizing investor funds to purchase extra Bitcoin.
A New York District court docket issued the preliminary injunction (PI) and short-term restraining order (TRO) on March 13 in reference to a broader dispute surrounding its merger with Fatbrain AI, the Genius Group mentioned in an April 3 assertion.
Fatbrain AI and Genius Group accomplished a merger and buy settlement in March 2024, however by Oct. 30, Genius initiated arbitration procedures to terminate, alleging fraud by Fatbrain AI executives linked to the deal.
Supply: Roger James Hamilton
In February, Fatbrain AI executives Michael Moe and Peter Ritz filed for the TRO and everlasting injunction, blocking Genius Group from promoting its shares, elevating funds and shopping for extra Bitcoin pending the arbitration final result.
The injunction has pressured Genius Group to shut divisions, halt advertising and marketing actions and promote 10 Bitcoin (BTC) from its stash of 440, value over $23 million at present costs, to proceed funding its operations. The agency hasn’t dominated out extra gross sales sooner or later.
“Genius is taking all obligatory measures to reduce Bitcoin gross sales however anticipates that it might want to downsize its Bitcoin Treasury within the coming months within the occasion the PI stays in place,” the agency mentioned.
Fatbrain AI shareholders additionally filed two lawsuits towards Fatbrain AI executives, together with Moe and Ritz, and Genius Group, in April 2024, alleging violation of federal securities legal guidelines in reference to the merger, ASX legislation mentioned in an October assertion.
Two shareholder lawsuits towards Fatbrain AI alleged conduct through the merger was fraudulent, which defrauded shareholders of $30 million. Supply: ASX Regulation
Genius Group was subsequently voluntarily dismissed from the fits on Feb. 14.
Genius Group claims it’s breaking Singapore legislation by following order
Genius Group says the US court docket injunction has additionally pressured it to interrupt Singapore legislation by halting share compensation to staff as a part of its employment agreements.
“We by no means dreamed that it was doable {that a} US court docket might block the corporate from with the ability to difficulty shares, elevate funds or purchase Bitcoin — all actions that will usually be determined by a public firm’s shareholders or Board quite than a court docket,” mentioned Genius Group CEO Roger James Hamilton.
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He mentioned the agency will “proceed to fly the flag for Bitcoin,” even when legally banned from constructing out its treasury.
Fatbrain AI didn’t instantly reply to Cointelegraph’s request for remark.
Synthetic intelligence agency Genius Group first introduced in November 2024 that it had taken the primary steps to construct a Bitcoin treasury by buying 110 Bitcoin for $10 million.
The agency had earlier introduced its general objective of committing 90% or extra of its present and future reserves to be held in Bitcoin, with an preliminary goal of $120 million, which noticed the inventory value surge by 66%.
Genius Group’s share value is down 9.80% within the final buying and selling session to $0.23, with an additional 3.74% drop after the bell to $0.22, Google Finance knowledge reveals.
Genius Group’s share value went down over the last buying and selling session and after the bell. Supply: Google Finance
The inventory hit an all-time excessive of over $96 in June 2022 however has since misplaced over 99% of its worth.