Gemini faces lawsuit as stock drops and losses rise, raising concerns over IPO disclosures and strategy shift.
Crypto exchange Gemini is under growing legal pressure after its stock plunged following its IPO. In particular, allegations center on whether Gemini presented an accurate picture of its business strategy. Investors have now taken the company to court, raising concerns about its disclosures around its public listing.
Gemini Under Fire as Lawsuit Targets IPO Disclosures and Stock Collapse
Gemini has been hit with a class-action lawsuit filed in the U.S. District Court for the Southern District of New York. Plaintiffs claim the company misled investors before and after its September 2025 initial public offering. Executives, including Tyler and Cameron Winklevoss, are named in the complaint.
According to the filing, Gemini stated that it plans to grow its user base and expand internationally. However, investors allege that the firm failed to disclose plans for a major strategic shift. That shift later changed the company’s direction and revenue focus.
Gemini’s stock debuted on Nasdaq at $32 and has since fallen more than 80%. As of Thursday, shares closed at $6.01. Plaintiffs argue that undisclosed internal plans contributed to this decline.
Gemini Losses Surge to $582M as Business Reset Deepens
In early February, Gemini introduced its “Gemini 2.0” strategy. Under this plan, the company moved toward a prediction market product. At the same time, it announced plans to cut about 25% of its workforce.
Gemini also exited several regions, including the UK, EU, and Australia. According to the lawsuit, these moves marked a reversal from earlier expansion plans described during the IPO.
The lawsuit claims Gemini made its business appear stronger than it really was. It also points to top executives leaving as a sign of internal instability. Notably, departures included the chief financial officer, chief operating officer, and chief legal officer.
Financial results add further context to investor concerns. Gemini reported fourth-quarter revenue of $60.3 million, up 39% year over year. However, net losses widened sharply to $140.8 million, compared to $27 million a year earlier.
For full-year 2025, losses reached $582.8 million, up from $158.5 million in 2024. Meanwhile, the company is trying to cut costs. Tyler and Cameron Winklevoss said workforce reductions have reached about 30% since the start of the year.
Now, the lawsuit could affect how crypto companies handle their IPO disclosures. Investors are closely watching to see how the court decides these claims.
