Gemini (GEMI), IPO false information controversy class-action lawsuit... stock price plummets 78%

The American cryptocurrency platform Gemini (GEMI) is embroiled in a class-action lawsuit for allegedly providing false information to investors during its initial public offering (IPO). Amid a backdrop of plummeting stock prices and executive departures leading to increased investor losses, disputes over legal liability are unfolding comprehensively.

On the 28th local time, the American securities law firm Kessler Topaz Meltzer & Check announced that a class-action lawsuit for securities fraud against Gemini (GEMI) has been filed in the Southern District Court of New York. This lawsuit targets investors who purchased the company’s Class A common stock or related securities between September 12, 2025, and February 17, 2026.

The complaint states that Gemini exaggerated the sustainability of its core business—its cryptocurrency platform—and its global expansion strategy in the registration documents and prospectus submitted during the IPO. Specifically, it is accused of being overly optimistic in presenting the company’s financial outlook and growth potential, failing to adequately disclose the inevitable restructuring situations in the future. The plaintiffs argue that this led investors to make investment decisions based on distorted corporate value information.

The problem is that the actual operating conditions sharply deteriorated afterward, impacting the market. In February 2026, Gemini announced its “Gemini 2.0” strategy, which completely adjusted its business direction. The company stated it would strengthen its predictive market functions, lay off 25% of its workforce, and withdraw from the UK, EU, and Australian markets, with outside observers commenting that the foundations of its growth strategy had been shaken. Following this announcement, the stock price fell over 8% in one day.

Just ten days later, the company faced additional setbacks as its Chief Operating Officer (COO), Chief Financial Officer (CFO), and Chief Legal Officer (CLO) all resigned simultaneously. The preliminary earnings report for early 2025 also revealed a surge in operating costs of approximately 40%. After this news broke, the stock price further plummeted nearly 12%.

Ultimately, Gemini’s stock price fell from an IPO issue price of $28 to a recent range of $5, representing a decline of about 78%. Market evaluations indicate that there is a significant gap between the growth narrative presented in the early days of the IPO and the actual operating reality.

The core dispute of this lawsuit centers on whether the company omitted or distorted significant information that should have been disclosed in the prospectus. The plaintiffs assert that Gemini downplayed the uncertainties of its business model and cost structure issues, leading investors to underestimate the investment risks.

Investors can apply to participate in the lawsuit as lead plaintiffs until May 18, 2026, and whether they can recover their losses is expected to depend on the outcome of the lawsuit.

Comment: Recently, the U.S. stock market has been strengthening its regulatory trend regarding the disclosure responsibilities of IPO companies. In this context, this incident is likely to become a substantial test of business transparency for cryptocurrency platform companies.