Gemini Stock Crashes 82% as Investors Sue Over Prediction Market Pivot
Gemini investors filed a class-action lawsuit against the crypto exchange and founders Cameron and Tyler Winklevoss after the stock lost 82% of its value since its September debut. The lawsuit claims the company made an abrupt, undisclosed pivot to prediction markets while shuttering operations in multiple regions.
Key Takeaway
Gemini's radical pivot from crypto trading to prediction markets wiped out ₱1,319 ($22) in shareholder value per share.
Gemini investors filed a class-action lawsuit against the crypto exchange and founders Cameron and Tyler Winklevoss after the stock crashed from ₱1,679 ($28) at its September debut to $5.82.
The lawsuit alleges IPO documents falsely portrayed Gemini as focused on expanding its reach as a crypto trading platform. Instead, the company engaged in an abrupt pivot to prediction markets, shuttering operations in the UK, European Union, and Australia while laying off nearly one-third of its workforce, including the chief operating officer, chief financial officer, and chief legal officer.
IPO documents claimed Gemini was predominantly focused on attracting new users, increasing trading volume, and adding new assets to its exchange. Founders Cameron and Tyler Winklevoss published a blog post in February detailing their "Gemini 2.0" strategy that made prediction markets more front and center in the company's experience. The lawsuit says this expensive and disruptive restructuring contradicted promises made to investors just months earlier.
Gemini expects to post a net loss of up to ₱36.09 billion ($602 million) for 2025. The complaint states investors suffered losses as a result of the defendants' wrongful acts and omissions, along with the precipitous decline in the company's stock price.
The timing couldn't be worse for crypto IPOs. The sector raised ₱203.84 billion ($3.4 billion) through public offerings in 2024, but companies including Crypto.com, Messari, and Optimism Labs began slashing jobs at the start of 2026 as Bitcoin lost nearly half its value since October. Kraken confidentially filed for an IPO in November but reportedly put those plans on hold.
Cameron Winklevoss donated millions to Donald Trump's reelection campaign and reportedly derailed Trump's first choice for CFTC leadership. The company announced its prediction market launch in December, followed in February by the full scope of its strategic shift that included projected losses of ₱16.01 billion ($267 million) before interest, taxes, depreciation, and amortization.
This article was written based on reporting from Dlnews.
