AI-Driven Education Group Genius Group Reveals Forced Bitcoin Reserve Sale
Genius Group, an AI-driven education group, disclosed that it was compelled to sell its Bitcoin reserves following restrictions imposed by a U.S. District Court (Southern District of New York), which hindered the company from raising funds in BTC, issuing stock, or investing in investor funds. Its chief executive now claims that the court order is based on fraudulent acts and has pushed the company into illegal territory.
Fraud Allegations, Legal Drama, and Bitcoin
In an official press release, the company explained that its legal challenges have escalated due to disputes involving Fatbrain AI (LZGI), its officials, and a controversial Asset Purchase Agreement (APA). The arbitration process to terminate the APA began on October 30, 2024, following shareholder lawsuits and fraud allegations against LZGI executives Michael Moe and Peter Ritz. The parties agreed to a preliminary injunction (PI) on December 17 of that year, which temporarily halted activities related to Genius shares associated with the APA.
The situation intensified after the U.S. Securities and Exchange Commission (SEC) brought shareholder fraud charges against Moe and Ritz. At their request, a temporary restraining order (TRO) was approved on February 14, 2025. This order prevented Genius from selling stock, raising funds, or even purchasing Bitcoin.
The Singapore-based company claims that the TRO and subsequent PI granted by the Southern District of New York are based on false statements aimed at extorting the company financially. In its defense, Genius submitted recorded meeting minutes to the court on February 27, allegedly detailing how Ritz used legal proceedings to coerce the company into further funding.
LZGI shareholders also raised this recording in another lawsuit filed in Florida, after which Genius was dismissed as a defendant. With the PI still in effect, Genius asserts that it is legally prohibited from raising funds or utilizing its $150 million ATM funding facility, despite board and shareholder approval. This includes a ban on compensating employees through stock issuance — actions the company believes violate Singapore law.
Due to the inability to access traditional funding, Genius has begun scaling back operations, resulting in the cessation of all marketing and sponsorship activities. The company has even started liquidating part of its Bitcoin treasury, reducing its holdings from 440 BTC to 430 BTC to sustain operations.
On March 19, the company stated that it filed an emergency motion with the U.S. Court of Appeals, requesting the Second Circuit Court to vacate the PI while awaiting the outcome of its appeal. Despite a 53% drop in its stock price over the past six weeks, from $0.47 to $0.22, the company insists that it remains committed to maintaining its public listing and addressing what it describes as financial manipulation schemes.
It continues to warn that ongoing court-imposed restrictions pose a significant threat to its operational viability, yet expresses confidence that its legal and strategic actions will help mitigate risks. Its CEO, Roger James Hamilton, stated that the company “will not yield to fraudsters and market manipulators,” who themselves are involved in multiple lawsuits related to fraud and misconduct. He assured that Genius would take all necessary actions and increase efforts.
“Even if legally prohibited from establishing our Bitcoin treasury, we will continue to fly the Bitcoin flag. We believe Bitcoin ensures transparency and completely blocks wire fraud and shareholder fraud related to the current litigation subjects.”
Genius Follows Strategic Footsteps
As previously mentioned, Genius first announced plans last November to allocate at least 90% of its current and future holdings to Bitcoin. Subsequently, this AI-driven education and business acceleration company stated that through its Bitcoin-first strategy, it aims to become one of the first companies listed on the New York Stock Exchange to fully embrace the strategic Bitcoin tactics led by Michael Saylor.
