Gemini, the cryptocurrency exchange founded by Tyler and Cameron Winklevoss, is facing a federal class action lawsuit from shareholders who allege the company misled investors ahead of its public listing last fall. The suit was filed this week in the Southern District of New York. Plaintiffs claim Gemini and its founders made materially false statements in the period leading up to the company going public in September.
According to the complaint, Gemini overstated the viability of its core crypto platform business and exaggerated its commitment to expanding international operations. Shareholders also allege the company withheld information indicating it was on the verge of a costly and disruptive internal restructuring. These omissions, the plaintiffs argue, painted a misleading picture of the company’s financial health and strategic direction at the time of its initial public offering.
The restructuring concerns proved well-founded when, in February, Gemini laid off more than a quarter of its workforce and fully withdrew from operations in Europe and Australia. The company stated it intended to rely on artificial intelligence to improve efficiency going forward. That same day, the Winklevoss twins announced plans to make a new prediction market platform a central feature of the Gemini product, a significant strategic shift that shareholders say was improperly concealed before the IPO.
Since Gemini began trading on the Nasdaq under the ticker GEMI approximately six months ago, its stock has lost nearly 85% of its value. Over the same period, Bitcoin has declined roughly 40%. Shareholders contend that the steep drop in Gemini’s share price is closely tied to the company’s alleged failure to disclose the true state of its business and its future strategic plans at the time it went public.
“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s securities, Plaintiff and other class members have suffered significant losses and damages,” the complaint states. Gemini did not respond to a request for comment on the lawsuit. The company has not publicly addressed the specific allegations raised in the filing.
Despite the legal pressure, Gemini shares rose nearly 7% in after-hours trading on Thursday after the company reported more stable revenue streams in 2025 and indicated progress from its cost-cutting measures. However, the company also disclosed a net loss of $582.8 million for the year. As of Friday, Gemini’s stock was trading at $5.66, down 5.8% on the day.
Originally reported by Decrypt.
