Genius Group has been ordered by a U.S. court to sell its Bitcoin holdings, following a ruling that blocks the company's financial transactions.

This court order was issued by the U.S. District Court for the Southern District of New York on March 13, 2025, amid ongoing legal disputes with Fatbrain AI.

The injunction is linked to a dispute over Genius Group's merger with Fatbrain AI, which was finalized in March 2024, but Genius initiated arbitration in October 2024, alleging fraud by Fatbrain executives.

In response to Genius Group's arbitration proceedings, Fatbrain executives sought a temporary restraining order in February 2025, effectively freezing Genius Group's corporate activities until the issue is resolved.

The legal conflict has led to additional lawsuits, with Fatbrain AI shareholders filing claims against both companies for violating federal securities laws, although Genius Group was dismissed from these suits in February 2025.

Compounding the situation, the SEC has also filed allegations of shareholder fraud against Genius Group, further complicating its legal challenges.

As a direct result of the injunction, Genius Group's shares have plummeted by 53%, dropping from $0.47 to $0.22.

This decline is part of a larger trend, with the company's stock falling over 99% from a peak of $96 in June 2022.

The ongoing legal issues raise concerns for other companies holding Bitcoin, highlighting the potential risks associated with Bitcoin investments despite a generally pro-crypto stance from the current U.S. SEC leadership.

Despite these challenges, CEO Roger James Hamilton has reaffirmed the company's commitment to Bitcoin, emphasizing its role in ensuring transparency and preventing fraud.

Genius Group plans to appeal the preliminary injunction at the U.S. Court of Appeals for the Second Circuit, arguing that the court's order is causing it to breach Singaporean law regarding employee share compensation.

In light of funding restrictions imposed by the court order, the company is downsizing and reducing operations, including closing divisions and halting sponsorships and marketing efforts.