DeFi Technologies Faces Investor Lawsuit Amidst Revenue Downgrade and Leadership Shift

DeFi Technologies Inc. finds itself navigating a challenging period marked by legal action and financial recalibration. Multiple U.S. law firms have initiated class action proceedings against the company, alleging violations of federal securities laws. The core allegations center on a substantial reduction in revenue guidance and purported failures to adequately disclose competitive pressures. These legal headwinds coincide with the publication of weaker quarterly results and a change in executive leadership, collectively weighing on investor sentiment.

The immediate catalyst for the current situation was the third-quarter financial report issued on November 14, 2025. The figures revealed a softening in operational performance:

• Q3 2025 Revenue: $22.5 million (compared to $28.1 million in the prior-year period)
• Q3 2025 Operating Income: $9.0 million (down from $14.4 million a year earlier)

More significantly, management drastically revised its full-year outlook. The revenue forecast for 2025 was nearly halved, reduced from approximately $218.6 million to $116.6 million—a cut of almost 50%. Company leadership attributed this adjustment to two primary factors: an increasing number of competitors in its Digital Asset Treasury (DAT) segment and a consolidation in digital asset prices, which temporarily reduced arbitrage activity on its DeFi Alpha trading desk.

Details of the Securities Class Action

The class action lawsuit, filed in the United States District Court for the Eastern District of New York, is directed at investors who purchased the company's securities between May 12, 2025, and November 14, 2025. The plaintiffs accuse DeFi Technologies and certain of its officers of contravening Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as SEC Rule 10b-5.

The legal complaint hinges on three principal allegations:

1. Misleading Financial Projections: The company is accused of initially communicating a significantly higher revenue guidance for 2025 before implementing the severe downward revision.
2. Inadequate Risk Disclosure: It is alleged that DeFi Technologies failed to properly disclose the mounting competitive pressures within its Digital Asset Treasury operations.
3. Delayed Strategy Implementation: The DeFi Alpha arbitrage strategy, promoted as a key revenue driver, reportedly experienced significant delays that were not communicated to investors in a timely manner.

The law firms Bernstein Liebhard LLP, DJS Law Group, and The Schall Law Firm are among those publicizing the ongoing litigation.

Concurrent Leadership Transition

Announced concurrently with the Q3 results, the company disclosed a major leadership change. Co-founder Johan Wattenström assumed the roles of Chief Executive Officer and Executive Chairman. The former CEO, Olivier Roussy Newton, transitioned to a position as Strategic Advisor. While the company did not formally link this shift to the financial results or guidance cut, the timing amplified market uncertainty during a period of pronounced operational adjustment.

Should investors sell immediately? Or is it worth buying DeFi Technologies?

Company Fundamentals and Operational Developments

Despite the legal and financial challenges, DeFi Technologies reports a solid liquidity position. As of September 30, 2025, the company held:

• Cash and Equivalents: $119.5 million
• Digital Asset Treasury Holdings: Approximately $46.2 million
• Total Treasury Assets: $165.7 million
• Valour Assets Under Management (AUM): $989.1 million

Operationally, its subsidiary Valour has continued to advance its exchange-traded product (ETP) business. In early December, it received regulatory approval to list four digital asset ETPs on Brazil's B3 exchange. Furthermore, its portfolio holding Stablecorp achieved a milestone with QCAD, which was established as Canada's first compliant CAD-denominated stablecoin.

Market Reaction and Legal Deadlines

Traded on the NASDAQ under the ticker symbol DEFT, the company's shares came under notable pressure following the guidance reduction and lawsuit announcements. In early December trading sessions, the stock declined approximately 10–12% as the market digested the new information.

For affected investors, key legal deadlines are in place. The class period for the lawsuit is defined as May 12, 2025, to November 14, 2025. Investors seeking to be appointed as the lead plaintiff in the action must file the necessary motions by January 30, 2026. Investors who do not take on this role may still remain passive members of the class, eligible to participate in any potential settlement or judgment.

Path Forward: Communication and Long-Term Prospects

In the near term, DeFi Technologies faces the dual task of managing the legal proceedings while working to restore market confidence. The management team is scheduled to present at the Northland Growth Conference, offering a platform to elaborate on the revised strategy, competitive landscape, and status of its arbitrage operations.

Historically, securities class action lawsuits of this nature can span several years. For the company's standing in the capital markets, two factors will be critically important: the successful operational execution of its revised business strategy and a commitment to more transparent and reliable financial communication moving forward. Concurrently, broader sector dynamics—including regulatory developments and cryptocurrency market trends—will significantly influence the pace at which DeFi Technologies can rebuild trust following this period of substantial guidance correction and legal scrutiny.