Gemini (GEMI) shares fell roughly 5.0% at the New York open on 20 Mar after the crypto exchange reported steep financial losses for 2025 and disclosed a class action lawsuit tied to its post-IPO strategy. Investors are actively punishing the stock as the exchange grapples with deteriorating core metrics and mounting legal challenges.
The stock traded at about $5.66 by 16:45UTC, reversing earlier gains in after-hours trading following the release of the financial results after the market close on 19 Mar. The Winklevoss-owned firm reported a full-year loss of $15.52 per share for 2025, which came in at nearly double the expectations of market analysts. Fourth-quarter results showed a sharp decline in retail trading activity.
Trading slowdown drives revenue shift
Transaction revenue fell significantly as trading volumes weakened across the board. Services and interest income overtook trading fees as the primary revenue source for the first time in the history of the company. Growth in products such as the credit card and staking services helped support the top line, even as core exchange activity deteriorated.
The financial results arrive amid a broader structural shift across crypto markets. Trading-driven business models face immense pressure, and firms are increasingly pivoting towards recurring revenue streams to survive the downturn. Gemini has already begun retrenching its global operations to stem the bleeding. The company announced it is pulling out of several regions in February, cutting around 25% of staff and executing a pullback from international markets to refocus entirely on its US business. The workforce has now been reduced by roughly 30% since the strategic cuts began, executives noted during the earnings call on 20 Mar.
Legal pressure compounds market slump
Investor pressure has intensified dramatically following the catastrophic earnings release. Shareholders filed a class action lawsuit in New York earlier this week, alleging the company overstated its growth prospects during its initial public offering in September 2025 and failed to disclose significant strategic changes. The legal filing accuses the executive team of misleading the public about the true health of the exchange business and the massive costs associated with its failed global expansion.
The stock is now down nearly 80% from its IPO price of $28. This collapse reflects sustained institutional concerns over profitability, cost structure and overall execution at the highest levels of the firm. The exchange had previously warned that operating expenses had surged, driven by rising personnel costs and international expansion efforts that have since been aggressively scaled back.
The latest financial results and the subsequent legal challenge highlight the mounting pressure on listed crypto firms to demonstrate sustainable business models beyond basic spot trading. Public market investors are now demanding clearer paths to profitability and significantly more transparency from executive leadership, according to the legal filing.
