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Genius Group, an AI-driven education company, announced it must sell its Bitcoin holdings after a U.S. court order blocked the company from selling shares, raising funds, or purchasing Bitcoin. The U.S. District Court for the Southern District of New York issued a preliminary injunction on March 13, preventing Genius Group from accessing its $150 million at-the-market funding and continuing its Bitcoin-first strategy . As a result, the company has reduced its Bitcoin ( BTC ) holdings from 440 to 430 Bitcoin to fund operations , according to a company note . The legal battle stems from Genius Group’s attempt to terminate an Asset Purchase Agreement with Fatbrain AI, a deal that has become the focus of multiple lawsuits. In October 2024, Genius Group initiated arbitration to exit the agreement. By December, both companies had agreed to a preliminary injunction related to the APA. Fatbrain AI shareholders later filed lawsuits against the company and its executives, Michael Moe and Peter Ritz, alleging fraud in connection with the APA. The SEC also brought shareholder fraud allegations against Fatbrain AI, according to Genius Group. In response, Moe and Ritz sought a Temporary Restraining Order and a preliminary injunction against Genius Group, which the court granted on February 14. Genius Group claims the injunction was based on false statements and has filed motions to lift the restrictions. The company also submitted a transcript of a meeting with Ritz, alleging he detailed a strategy to use the court order to extract money from Genius Group. Fatbrain AI shareholders have also filed this transcript in their lawsuit against Moe and Ritz in Florida, according to the note. Genius Group CEO Roger James Hamilton said the company did not anticipate that a U.S. court could restrict its financial decisions. “We never dreamed that it was possible that a U.S. court could block the company from being able to issue shares, raise funds or buy Bitcoin – all actions that would normally be decided by a public company’s shareholders or Board rather than a court,” Hamilton said. The court order has forced Genius Group to restructure its operations, including downsizing, closing divisions, and halting sponsorships, marketing, and investments. The company has also been unable to issue share-based compensation to employees, which it says puts it in violation of Singaporean labor laws. “We will not bend to fraudsters and market manipulators that are themselves the subject of multiple lawsuits for fraud and misconduct,” Hamilton said. Since the restraining order, Genius Group’s share price has dropped 53%, and its market capitalization is now at 40% of its Bitcoin Treasury value. The company has filed an emergency motion with the U.S. Court of Appeals for the Second Circuit to overturn the injunction. Genius Group adopted a Bitcoin-first strategy in November 2024, aiming to hold Bitcoin as its primary treasury reserve asset. Despite being forced to sell some holdings, the company reiterated its commitment to Bitcoin and its belief in its long-term value.

"A man’s power lies in his discipline. Master your habits, own your time, and watch the world bend to your will. Stay the course."

Everyone will bend their knee to Bitcoin. The faster you do it the better.

If this is true we’re very close to the suddenly moment. Bitcoin can go beyond $1M at any moment. I didn’t think IMF would bend the knee so fast👀

Bybit CEO Ben Zhou confirmed in a Friday livestream that the $1.5 billion hack against his crypto exchange lost the firm the vast majority of its customers’ ETH holdings. “I believe it was around seventy percent,” Zhou told viewers, when asked how much was lost relative to the company’s ETH assets under management. “We normally keep sixty to seventy prevent in the cold wallets, and I believe this was the amount.” What Caused The Hack? The breach, first flagged by on-chain sleuth ZachXBT and other high profile accounts on Friday, saw over 400,000 Ether suspiciously leave Bybit’s cold wallet address, before rapidly being swapped its staked mETH and stETH tokens for ETH. Security experts at Cyvers told CryptoPotato that the hackers tricked those controlling the keys to Bybit’s cold wallet into signing a malicious transaction which, from the signers’ perspectives, looked honest at the time. Jack Sanford, CEO of Sherlock DeFi, had similar findings, said the transaction would have changed the rules of the multisig wallet’s smart contract to bend to the hackers’ wishes. Exact details on how the signers were fooled remain unknown. “The UI itself could have been compromised, [or] Each of these honest people could have had their actual computer compromised,” wrote Sanford. ZachXBT, a popular on-chain detective for large crypto hacks, submitted “definitive proof” on Friday that the hack was pulled off by the North Korean “Lazarus Group,” according to Arkham Intelligence. Lazarus are the most notorious hackers in the world, attacking several major crypto exchanges in the past. “TLDR myself and Josh from CF connected the Bybit hack on-chain to the Phemex hack,” said ZachXBT in response. Can Bybit Cover The Loss? Despite the seismic loss, Zhou assured followers in a tweet that all client losses remained covered by the exchange. “All client assets are 1:1 backed—we can cover the loss.” Zhou added during the stream that the exchange is reaching out to its partners in search of a “bridge loan” to support its liquidity needs as it processes “massive withdrawals” in the short term. “We actually already secured almost 80% of the Ethereum that’s been stolen as a bridge loan, to help us with the liquidity crunch.” So far, Zhou has resisted the idea of pausing exchange withdrawals. Binance co-founder Changpeng Zhao suggested that Bybit do so as a precaution – even if it spurs more fear in the market – offering his own aid if required. “1.5 billion is fear enough,” he said. “Better to be safe than sorry now.” More lightheartedly, BitMEX co-founder Arthur Hayes called on Ethereum co-founder Vitalik Buterin to “roll back the chain” to support Bybit – an action Ethereum leaders coordinated ten years ago in response to the DAO hack. The post ByBit Lost 70% Of Ethereum Holdings To Hacker, Says CEO appeared first on CryptoPotato.