Shareholders of Gemini Space Station have filed a proposed class action against the cryptocurrency exchange and its billionaire founders, Cameron and Tyler Winklevoss, accusing them of misleading investors ahead of the company’s 2025 stock market debut.
The lawsuit, filed in Manhattan federal court late Wednesday, claims that Gemini’s IPO materials made the business look stronger than it was, particularly its crypto platform and international expansion plans, without disclosing how close the company was to a major shift in strategy.
A key part of the complaint is Gemini’s shift toward prediction markets, which investors said the company did not properly disclose before its Sept. 11, 2025 IPO, even though it marked a major departure from the business it had presented to the market.
The lawsuit says the gap between what investors were told and what Gemini was preparing became more visible in February, when the company said it would lay off roughly a quarter of its staff, pull back from operations in the European Union, Britain, and Australia, and disclosed the departure of its chief operating officer, chief financial officer, and chief legal officer.
Gemini also warned it could post a net loss of as much as $602 million in 2025, adding to pressure on the stock and deepening investor concerns about the company’s outlook.
The case covers investors who bought shares between Sept. 12, 2025, and Feb. 17, 2026, and seeks damages tied to losses suffered during that period.
In a letter to shareholders released alongside the company’s strategic reset, the Winklevosses defended the shift, saying that prediction markets could grow to rival or even exceed today’s markets and argued that concentrating on the United States would cut costs and speed Gemini’s route to profitability.
Shares Tumble on Legal Risk
Gemini shares fell sharply after news of the lawsuit, briefly sliding to about $5.92 before recovering during the session. After the initial drop, the stock began to steady in the high-$5 to low-$6 range, suggesting the worst of the panic selling may have eased, at least for now.
By the latest reading on the chart, the stock was trading around $6.20, with premarket pricing near $6.39, suggesting some investors were willing to buy the dip after the initial shock. Even so, the move still reflects a cautious market weighing the legal risk against Gemini’s broader restructuring plan.
Near term, investors are likely to watch whether Gemini can hold above $6 and push through the $6.20 to $6.40 range, as a move above that zone could point to improving sentiment, while a slide back below roughly $5.90 would signal that pressure on the stock is not over.
