Shareholders have launched a class action in New York accusing crypto exchange Gemini, its co-founders Tyler and Cameron Winklevoss, and several executives of misleading investors around the company’s September 2025 IPO — allegations tied to a dramatic post-IPO strategic pivot.
The complaint, filed Wednesday in the U.S. District Court for the Southern District of New York, says Gemini’s IPO documents were “negligently prepared” and contained material misstatements or omissions. According to the plaintiffs, those filings painted a growth plan built on expanding the exchange: boosting monthly transacting users (MTUs), increasing average daily trading volume, broadening the asset slate, and growing retail and institutional customers internationally.
But the suit alleges defendants repeatedly made “materially false” statements during the Class Period (September 12, 2025–February 17, 2026), omitting any hint that Gemini was preparing an abrupt strategic shift away from its exchange-first, international expansion playbook.
That “truth” surfaced in February 2026, the filing says, after the Winklevoss twins unveiled “Gemini 2.0.” In a company blog post, they said Gemini would put prediction markets “more front and center” in the user experience, cut its workforce by about 25%, and exit the U.K., EU and Australian markets — a stark change from the IPO narrative. The twins framed the moves as necessary simplification to stay competitive after international setbacks.
Investors punished the stock: the complaint says Gemini’s Class A shares fell 8.72% to $6.70 on February 5, 2026 following the pivot announcement, and slid 12.9% on February 17, 2026 amid news that three senior leaders were leaving. A regulatory filing later disclosed that COO Marshall Beard, CFO Dan Chen and CLO Tyler Meade had departed effective immediately. The lawsuit also flags a jump in operating expenses — $520–$530 million, a roughly 40% year-over-year increase — cited by the company in filings.
Gemini’s share price hit an all-time low of $5.51 on March 20 before recovering slightly to about $5.75, a decline of more than 80% from its September peak near $40, the complaint notes.
Plaintiffs say they and other investors who bought shares at the IPO or during the Class Period suffered significant losses from the alleged misrepresentations. They are seeking a jury trial and damages on behalf of the class.
The suit underscores the legal and market risks public crypto firms face when strategic changes diverge sharply from earlier IPO disclosures — and adds another high-profile case to the list of investor claims targeting the industry’s listed exchanges.
Read more AI-generated news on: undefined/news
