Gemini crypto exchange has been dragged to court in New York over its recent IPO, which took place last year. According to reports, Gemini was hit with a class-action lawsuit in New York tied to its 2025 IPO. The company has been accused of misleading investors about its business strategy before and after its initial public offering last year.
According to the court filing, “The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation.” The complaint, filed in the U.S. District Court for the Southern District of New York, accuses not only Gemini but also executives, including Tyler and Cameron Winklevoss.
Gemini slammed with a lawsuit for misleading investors
The lawsuit follows the firm’s stock dip amid a post-IPO pivot. The timeline? On February 5, 2026, Gemini filed a Regulation FD disclosure on Form 8-K with the SEC. The Winklevoss brothers announced a corporate pivot to “Gemini 2.0.” They listed three changes to Gemini’s operations, noting that Gemini’s prediction market would be “more front and center in our experience.”
In addition, the company mentioned that Gemini would reduce its workforce by 25% and exit the United Kingdom, the European Union, and the Australian markets. “On this news, Gemini’s Class A common stock price fell $0.64 per share, or 8.72%, to close at $6.70 per share on February 5, 2026,” the class action lawsuit states. Gemini reported an increase of 39% in Q4 revenue to $60.3 million compared to the previous year. The revenue increase exceeded the analyst’s estimate of $51.7 million.
After these disclosures, Evercore ISI lowered its rating on the Company’s stock from outperform to in line and reduced its price target by 50%, lowering it from $15.00 to $10.00. In addition, Truist Securities downgraded Gemini’s common stock from buy to hold and cut its price target by 46% from $13.00 to $7.00, specifically due to its drastic reduction in headcount and its sudden exit from international markets.
Under Trump, crypto markets hit a new ATH last year. But now, crypto markets are under pressure with Bitcoin trading below $70,000. This comes amid factors such as a hawkish Federal Reserve stance that has kept interest rates steady, broader stock market declines, and risk-off sentiment. While 2025 saw a spate of crypto companies going public through IPOs (e.g., Circle and USDC stablecoin issuer, eToro, Bullish, Gemini, etc.), they are now facing difficulties.
Currently, Kraken, which confidentially filed for an IPO toward the end of last year, has now put its plans on hold. The filing came a day after Kraken was valued at $20 billion following its $800 million funding. So far, only crypto custodian BitGo has gone public, and its stocks have dipped by 44%, attributed to a messy market.
