What to know:
- Gemini, the crypto exchange founded by the Winklevoss twins, is facing a class-action lawsuit in New York over alleged misleading disclosures related to its 2025 IPO.
- The lawsuit claims Gemini’s IPO documents failed to disclose a strategic pivot to a prediction market-centric business model.
- Their stock price has fallen over 80% from its $28 IPO price to around $6, amidst regulatory scrutiny and executive departures.
Gemini cryptocurrency exchange, started by the Winklevoss twins, Tyler and Cameron, is being sued in New York with a class-action lawsuit that accuses it of making misleading disclosures related to its 2025 IPO.
The lawsuit, which was lodged in a Manhattan federal court, states that Gemini’s IPO papers depicted the company as a growing crypto platform mainly focused on expanding the customer base and the international footprint, while at the same time, they kept silent on a major strategic restructuring that would change the business model entirely.
Allegations of Misleading Disclosures
According to the complaint, the offering documents of Gemini were “materially false and misleading” because they did not disclose the company’s intentions to switch to a prediction market-centric business model, which up till then was unveiled to the public as “Gemini 2.0”.
This change of direction brought about the layoff of 25% of the workforce, the withdrawal from several major markets, such as the UK, EU, and Australia, and the closure of Nifty Gateway.
The lawsuit states that these changes, which were not sufficiently disclosed to the investors, resulted in a substantial drop in the market price of Gemini’s shares, which even ended up being 80% lower than the IPO price, which was initially $28, and is now only $6.
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Executive Departures
Following a major strategic shift, several high-level executives left the company, including the CFO, COO, and CLO, which the lawsuit cites as sign of internal upheaval.
Despite posting a solid 39% YoYrise in Q4 revenue to $60.3 million, Gemini’s loss even from operations increased substantially to $140.8 million compared to $27 million a year ago. Gemini’s P&L for 2025 showed a staggering net loss of $582.8 million as against $158.5 million in 2024.
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Regulatory Scrutiny and Market Impact
The lawsuit brings to light further regulatory hurdles that the company has to face. Earlier, the company agreed to a $50 million penalty and cessation order with the New York Attorney Generals office, in which it was accused of defrauding investors through its Gemini Earn program.
Since then, the companys stock price continues to be under pressure, and at last check on March 20 2026 the stock was trading at $6.01 per share.
Also Read: Gemini’s Q4 Earnings: Surging Ahead with Resilience in a Challenging Crypto Market
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