Gemini faces a class-action lawsuit from shareholders alleging misleading information about its strategy shift amid significant financial losses.
A class-action lawsuit has been filed against cryptocurrency exchange Gemini by shareholders, alleging that the company and its founders, Tyler and Cameron Winklevoss, misled investors regarding the firm's strategic direction during and after its IPO.
The lawsuit points to a November 2025 announcement where Gemini's management touted its international expansion plans and the launch of the exchange in "key global markets," describing the platform as its flagship product. Shortly after this, however, the Winklevoss twins made significant cuts, laying off 25% of their workforce and abandoning operations in the EU, UK, and Australia.
In a dramatic shift, the company refocused its business model towards prediction markets, culminating in the launch of the Gemini Predictions platform in December, which received approval from the Commodity Futures Trading Commission (CFTC). This transition coincided with an internal upheaval, marked by the departure of key executives including the CFO and COO, and a 40% increase in operating expenses. Over the past six months, the company's stock price has plummeted by more than 75%.
Investors are seeking a jury trial, claiming they bought shares at "artificially inflated prices" as a result of the management’s misleading statements. Gemini went public on Nasdaq in September 2025, issuing 15.18 million Class A shares at $28 each, raising a total of $425 million.
Latest Financial Results
On the same day as the lawsuit announcement, Gemini released its fourth-quarter financial results for 2025, reporting a 39% revenue increase year-over-year to $60.3 million, surpassing analyst expectations of $51.7 million. However, the company posted a net loss of $140.8 million for the quarter, a stark contrast to the $27 million loss reported the previous year, bringing the total annual losses to $585 million, significantly up from $156.6 million in 2024.
In a letter to shareholders, the Winklevoss twins described the quarter as the strongest in three years, attributing revenue growth to adjustments in their fee structure. They also addressed the layoffs, emphasizing the integration of artificial intelligence in their operations, stating, "Today, AI is involved in over 40% of changes to our production code. In the near future, this figure will reach 100%." They expressed optimism about U.S. regulatory policies favoring cryptocurrency, indicating plans to enhance their presence in the U.S. market.
Notably, in March, Crypto.com CEO Kris Marszalek announced a 12% workforce reduction due to similar AI-driven operational changes.
