Gemini Faces Class-Action Suit Over Prediction Market Pivot, Plummeting Stock Price

Crypto exchange Gemini is facing a class-action lawsuit from shareholders who allege the company illegally failed to disclose its foray into the prediction markets – and overestimated the viability of its struggling core businesses.

The federal lawsuit, filed this week in the Southern District of New York, alleges that Gemini and its founders, Tyler and Cameron Winklevoss, materially misled investors in the lead-up to the company’s initial public offering. last fall.

Gemini “overestimated the viability of its core business as a crypto platform” and “overstated its commitment to and/or the viability of growing its business by expanding its international operations,” the lawsuit alleges.

The shareholders further allege that Gemini withheld information that would have shown the company was ready for “an expensive and disruptive restructuring.” In fact, the exchange took place in February dismissed more than a quarter of its workforce left Europe and Australia entirely, saying it planned to rely on AI to increase business efficiency.

That same day, the Winklevoss twins announced the company planned to make its new prediction market platform “front-and-center” for users. Plans for this major pivot were also wrongly concealed when Gemini went public months earlier in September, shareholders claim.

Gemini did not immediately respond Declutter‘s request for comment on the case.

Since Gemini went public six months ago, the company’s (Nasdaq: GEMI) shares have lost nearly 85% of their value. Over the same period, Bitcoin has lost about 40% of its price. Gemini shareholders insist that the damage to Gemini’s stock has a lot to do with the company’s alleged inability to make public its state of affairs and future plans.

“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 reads.

On Thursday, Gemini shares rose almost 7% in after-hours trading after the company reported more stable revenue streams in 2025 and found success with its cost-cutting efforts, although it also reported a net loss of $582.8 million for 2025.

Shares of Gemini are down 5.8% to $5.66 on Friday, at the time of writing.