Gemini, the cryptocurrency exchange co-founded by Tyler and Cameron Winklevoss, is facing a proposed class-action lawsuit filed in Manhattan federal court. The complaint, submitted on Thursday, names the Winklevoss brothers along with other company executives as defendants. Lead plaintiff Marc Methvin alleges that Gemini misled investors during and after its initial public offering in September. The suit seeks a jury trial and financial damages on behalf of affected shareholders.
Gemini launched its Nasdaq IPO in September, pricing shares at $28. The stock briefly climbed to $40 before declining sharply, falling more than 80% to trade at approximately $6 by Thursday. The plaintiffs contend that investors purchased shares at what the complaint describes as artificially inflated prices in the period shortly following the offering. The lawsuit was filed in Manhattan federal court.
According to the complaint, Gemini’s IPO documents presented the exchange itself as the company’s core product, with an emphasis on growing its user base and expanding internationally. In November, executives publicly highlighted the company’s international progress and stated a commitment to entering key global markets. The plaintiffs argue these representations painted a misleading picture of the company’s strategic direction at the time.
The lawsuit alleges that Gemini made an abrupt shift in early February, when the Winklevoss brothers announced a pivot to prediction markets under a new initiative called Gemini 2.0. Alongside this strategic change, the company announced it would reduce its workforce by 25% and withdraw from markets in the European Union, the United Kingdom, and Australia. The complaint characterizes this as a sudden departure from the business model described in the company’s IPO materials.
Further turbulence followed later in February, when Gemini’s chief financial officer, chief operations officer, and chief legal officer all departed the firm. The company also reported operating expenses that had risen by approximately 40%, according to the lawsuit. These developments compounded investor concerns and contributed to a continued decline in the company’s share price.
The complaint states that shareholders suffered significant losses as Gemini’s stock reached an all-time low of $5.82 on February 20. The plaintiffs argue that the combination of the strategic pivot, workforce reductions, market exits, executive departures, and rising costs directly harmed investors who had relied on the company’s earlier disclosures. The class group is seeking damages to compensate for those losses.
Separately, Gemini reported on Thursday that its fourth-quarter revenues rose 39% year-on-year to $60.3 million, surpassing analyst expectations of $51.7 million. The positive earnings result stands in contrast to the legal and operational challenges the company is currently navigating. No immediate public response from Gemini or the Winklevoss brothers regarding the lawsuit was included in available reports.
Originally reported by CoinTelegraph.
