Gemini Lawsuit: Investors Sue Winklevoss Brothers Over Hidden IPO Pivot

Class-Action Lawsuit Filed Against Gemini

On March 18, a group of Gemini shareholders filed a class-action lawsuit against the crypto exchange, its co-founders Tyler and Cameron Winklevoss, and several top executives. The plaintiffs allege that the company's leadership deliberately misled investors during and after its initial public offering.

According to the complaint, Gemini's management publicly touted progress in international expansion during November, outlining plans to bring the exchange to "key global markets." The IPO prospectus positioned the exchange as the company's core product. Shortly after, however, the Winklevoss brothers cut 25% of staff and announced withdrawal from the EU, the United Kingdom, and Australia.

Simultaneously, the platform underwent a dramatic business model overhaul, pivoting toward prediction markets. In December, Gemini launched Gemini Predictions with CFTC approval.

Why This Matters

This lawsuit raises critical questions about corporate transparency in the crypto industry's public market era. Gemini listed on Nasdaq in September 2025, offering 15.18 million Class A shares at $28 each — above the initially planned range of $24–26. The offering raised a total of $425 million.

The plaintiffs claim they purchased shares at "artificially inflated prices" because management concealed its plans for a radical strategic pivot. Over the past six months, Gemini's share price has plunged more than 75%. Investors are demanding a jury trial and financial compensation.

Executive Exodus and Surging Costs

The strategic shift was accompanied by significant leadership upheaval. The company's chief financial officer, chief operating officer, and general counsel all departed. Against this backdrop, operating expenses surged by approximately 40%.

The Winklevoss brothers addressed the workforce reduction by pointing to aggressive AI adoption. They stated that AI now contributes to more than 40% of changes in the company's production code and predicted this figure would eventually reach 100%. The co-founders compared not using neural networks at Gemini to showing up at the office with a typewriter instead of a laptop.

Q4 2025 Financial Results

On the same day, Gemini released its financial results for Q4 2025. Revenue reached $60.3 million, a 39% year-over-year increase that exceeded analyst forecasts of $51.7 million.

However, net losses ballooned to $140.8 million for the quarter, compared with $27 million in the same period a year earlier. Full-year losses reached $585 million, up sharply from $156.6 million in 2024.

In a shareholder letter, Tyler and Cameron Winklevoss described the quarter as the strongest in terms of earnings in three years, despite declining trading volumes. They attributed the revenue growth to "deliberate work on commission structures in the second half of the year."

Doubling Down on the US Market

The Gemini co-founders expressed enthusiasm for what they described as crypto-friendly policies from US regulators and signaled plans to strengthen the company's domestic presence this year.

The trend of AI-driven workforce reductions extends beyond Gemini. In March, Crypto.com CEO Kris Marszalek disclosed the elimination of 12% of staff — roughly 180 employees — citing the integration of artificial intelligence across all company processes.