A proposed class-action complaint filed in Manhattan federal court accuses Gemini and its leadership of misrepresenting the exchange’s prospects during and after its September initial public offering. The suit, brought by shareholder Marc Methvin, names Gemini, co-founders Tyler and Cameron Winklevoss, and several company executives.
According to the complaint, Gemini’s IPO filings portrayed the exchange as a growing business focused on expanding its user base and international footprint, describing the trading platform as the company’s core product. Shares began trading at $28 on Nasdaq, briefly touched roughly $40, and then collapsed by more than 80%, trading near $6 when the suit was filed.
Plaintiffs say the company publicly touted progress in global markets as recently as November, only to announce in early February a sharp strategic pivot toward prediction markets under a new label, Gemini 2.0. At the same time, the company disclosed plans to cut about 25% of its workforce and to withdraw from the EU, UK and Australian markets. The complaint also notes the departures of the CFO, COO and chief legal officer and alleges operating expenses rose by roughly 40%.
The lawsuit contends those abrupt moves and disclosures inflicted heavy losses on investors, with the stock hitting an all-time low of $5.82 on Feb. 20. Plaintiffs seek a jury trial and damages for shareholders who purchased shares at what the filing calls artificially inflated prices following the IPO.
Gemini reported that fourth-quarter revenue rose 39% year over year to $60.3 million, exceeding analyst estimates of $51.7 million. The litigation is the latest development after the company’s post-IPO restructuring and executive departures.