Genius Group Limited announced Thursday that it must sell portions of its Bitcoin holdings after a U.S. court blocked its ability to raise funds through share sales. The ruling, issued by the United States District Court for the Southern District of New York (SDNY), stems from an ongoing legal battle involving the company’s terminated asset purchase agreement with Fatbrain AI (LZGI).
Court Order Blocks Financing Options
Genius Group, an AI-driven education firm, said the preliminary injunction (PI) prevents it from issuing shares or raising capital, including using investor funds to purchase Bitcoin. The injunction follows legal action by LZGI shareholders, who previously accused LZGI executives Michael Moe and Peter Ritz of fraud.
The dispute began when Genius Group sought to terminate its acquisition deal with LZGI in October 2024. By February 2025, Moe and Ritz obtained a temporary restraining order (TRO) barring Genius from share-related financial activities. The court later converted the TRO into a preliminary injunction on March 13, 2025, extending the restrictions.
Genius Group has since challenged the injunction, arguing that it was obtained through misleading claims and has put the company in legal conflict with Singaporean regulations. The company claims the order prevents it from compensating employees through share-based agreements, violating local labor laws.
Bitcoin Treasury Reduction and Business Impact
With funding options blocked, Genius Group stated it is being forced to sell portions of its Bitcoin holdings to sustain operations. The company has already reduced its holdings from 440 to 430 Bitcoin and anticipates further sales if the injunction remains.
To address financial constraints, Genius Group is also cutting costs, including downsizing operations, halting marketing efforts, and canceling event sponsorships. Additionally, it has filed an emergency motion with the U.S. Court of Appeals for the Second Circuit, seeking to overturn the injunction.
The company maintains that the legal actions are part of a broader fraudulent scheme targeting its assets. While it has been dismissed from related shareholder lawsuits, it continues to challenge the allegations against Moe and Ritz.
Genius Group emphasized its commitment to maintaining its publicly listed status and pursuing all available legal options to overturn the ruling.
