Genius Group Limited has been placed under a temporary restraining order by a New York court restricting the Singapore-based blockchain and  AI-driven edtech company’s ability to raise money and buy more Bitcoin in the midst of a legal battle with a group of institutional investors.

The decision, issued by the Commercial Division of the New York Supreme Court, forbids the firm from selling shares or using existing earnings to acquire cryptocurrency assets, undermining its recent efforts to increase its Bitcoin holdings and seek digital asset expansion and was compelled to lower its Bitcoin holdings from 440 to 430.

The Legal Battle

The New York Supreme Court Commercial Division made the ruling in relation to a pending lawsuit filed by Alto Opportunity Master Fund, SPC-Segregated Master Portfolio B. The group contends that the company’s plans to raise funds and invest in cryptocurrencies have the potential to damage shareholder value and violate securities law. The court’s ruling now imposes significant restraints on Genius Group’s crypto and financial strategies as public companies that invest in digital assets are facing increased scrutiny.

According to the official press release by the Genius Group, the company started a legal process to cancel its deal with Fatbrain AI (LZGI), and soon after, both companies agreed to freeze any trading of shares related to that deal. This came after LZGI’s shareholders sued the company and its leaders, Michael Moe and Peter Ritz, accusing them of fraud, accusing them of fraud, and the SEC charged those leaders with misleading investors. Later, on February 14, 2025, the same leaders, Moe and Ritz of LZGI, requested that the court prohibit Genius Group from purchasing Bitcoin, selling shares, or obtaining funds, including through a $150 million funding plan. 

The court approved the interim decree on March 13, 2025, and on that same day, issued a ruling making it permanent, imposing significant limits on Genius Group’s financial operations. The company mentions in the press release that, 

“Over the last six weeks, Genius has filed multiple letters and motions to the court explaining that the TRO and PI did not maintain the status quo pending arbitration, that they were based on false statements designed to defraud the court, and the intent of the filing of the TRO and PI was to extort further money from Genius.”

Furthermore, since the court issued the TRO on February 14, 2024, Genius Group’s share price has fallen 53%, dropping from $0.47 to $0.22. The company’s market value is now just 40% of what its Bitcoin holdings are worth. Genius says the restrictions from the SDNY court threaten its ability to keep running, but it also believes the steps it’s taking will help reduce that risk.

The Plan Forward

Genius Group submitted an emergency appeal to the U.S. Court of Appeals on March 19, 2025, for the Second Circuit to revoke the Preliminary Injunction (PI) and suspend it during review of the appeal. The company now awaits a decision. Meanwhile, since it is not permitted to raise money or sell shares, Genius is restructuring. It is downsizing by closing down portions of the business and halting all event sponsorships, marketing, and investment plans until the court removes the PI and it can grow again.

The  CEO of Genius Group, Roger James Hamilton, has said that he never thought a U.S. court would prevent the company from selling shares, raising funds, or purchasing Bitcoin—choices typically made by a company’s shareholders or board, not a court. He further added that

“We will not bend to fraudsters and market manipulators that are themselves the subject of multiple lawsuits for fraud and misconduct. We will continue to take all actions necessary and possible to protect the interests of our shareholders and the future of Genius Group. We will also continue to fly the flag for Bitcoin, even when legally banned from building our Bitcoin Treasury. We believe Bitcoin ensures transparency and prevents exactly the kind of wire fraud and shareholder fraud that are the subject of the current lawsuits.”