By Jonathan Stempel
NEW YORK, March 19 (Reuters) – Gemini Space Station and its billionaire founders Cameron and Tyler Winklevoss were sued by shareholders who said they were defrauded about the cryptocurrency exchange’s business prospects, and suffered losses as a strategy shift, job cuts and executive departures caused the stock price to fall.
In a proposed class action filed on Wednesday night in Manhattan federal court, shareholders said Gemini made false and misleading statements in marketing documents for its September 11, 2025 initial public offering by overstating the viability of its crypto platform and its ability to grow internationally.
They also said the New York-based company did not disclose it was poised for an “abrupt corporate pivot” to focus on prediction markets, where users wager on the likelihood of future events.
Shareholders said Gemini’s problems surfaced in February when the company said it would cut about 25% of its workforce and wind down European Union, UK and Australian operations; announced it was “parting ways” with its chief operating officer, chief financial officer and chief legal officer; and projected a potential $602 million net loss for 2025.
Gemini shares fell after those announcements to below $7, more than 75% below the $28 IPO price.
Shareholders said Gemini and the Winklevosses intended to and did “deceive the investing public.” The complaint seeks damages for shareholders between September 12, 2025 and February 17, 2026.
Gemini did not respond on Thursday to requests for comment.
After markets closed, Gemini reported a full-year net loss of $582.8 million, or $258 million before interest, taxes, depreciation, amortization and other adjustments.
In an accompanying shareholder letter, the Winklevosses said prediction markets “will be as big or bigger than today’s capital markets,” and focusing on the United States will reduce expenses and “meaningfully accelerate our path to profitability.” They also said artificial intelligence was a factor in the job cuts.
Tyler Winklevoss is Gemini’s chief executive, and Cameron Winklevoss is president. The identical twins are each worth $2.7 billion, according to Forbes magazine.
Gemini shares closed up 5 cents at $6.01 on Thursday. They rose 11% after market hours to $6.67.
(Reporting by Jonathan Stempel in New York, Editing by Franklin Paul, Diane Craft and Bill Berkrot)
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