DeFi Technologies Faces Mounting Legal and Operational Challenges

DeFi Technologies finds itself navigating a complex landscape of legal scrutiny and shifting market dynamics. Investor rights law firms have intensified their focus on the company, initiating securities class actions and alerting shareholders to a January 30, 2026, deadline for joining a consolidated lawsuit. The core allegation centers on claims that the firm misrepresented the prospects and implementation timeline of its DeFi Alpha arbitrage strategy.

A significant management shift accompanied the release of the firm's third-quarter 2025 results. Co-founder Johan Wattenström assumed the roles of Chief Executive Officer and Executive Chairman. Olivier Roussy Newton, the former CEO, transitioned to a Strategic Advisor position. This leadership change coincided with a stark revision of the company's annual outlook, which has heavily impacted investor sentiment.

Previously, DeFi Technologies had projected 2025 revenue of $218.6 million. In November, this forecast was slashed by approximately 47% to roughly $116.6 million. Company leadership attributed this drastic reduction to delays in executing DeFi Alpha arbitrage trades. They cited the rapid proliferation of other Digital Asset Treasury (DAT) companies and increased correlation in digital asset prices during the latter half of 2025 as primary causes.

The market reaction was severe. Following the revised guidance on November 14, 2025, the stock declined 27.59% over two trading sessions, closing at $1.05 on November 17.

Details of the Securities Class Action

The pending class action lawsuit alleges violations spanning from May 12, 2025, to November 14, 2025. The complaint accuses the company and its executives of:

• Issuing misleading statements concerning delays in the DeFi Alpha arbitrage strategy's rollout.
• Minimizing the competitive threat posed by rival DAT firms.
• Failing to disclose the negative impact of this competition on the strategy's execution.
• Providing inflated revenue projections for fiscal year 2025.

A pivotal company announcement on November 6, 2025, stated that DAT companies had "absorbed or delayed a significant portion of arbitrage opportunities over the past year." Subsequently, the share price fell 7.43% to close at $1.62.

Board Resignation and Shareholding Discrepancies

Further uncertainty arose on December 22, 2025, with the immediate resignation of supervisory board member Stefan Hascoet, who had served since June 2023.

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

Simultaneously, the company provided clarification on previously noted inconsistencies in shareholdings and custodial records, first identified in August 2025. According to DeFi Technologies:

• Reports from ShareIntel indicated ongoing discrepancies between positions reported by broker-dealers to DTC, CDS, and Broadridge.
• The company contacted 14 broker-dealers showing the largest variances.
• Five responses attributed differences to settlement timing and securities lending activity.
• Management maintains these imbalances did not affect the vote at the 2025 annual general meeting.

Q3 2025 Operational Snapshot

Despite these headwinds, DeFi Technologies reported several key operational metrics for the third quarter of 2025:

• Revenue: $22.5 million
• Operating Income: $9 million
• Cash & Cash Equivalents: $119.5 million
• Treasury Holdings: Approximately $46.2 million in digital assets
• Total Cash & Digital Assets: $165.7 million
• Valour Assets Under Management (AUM): $987 million
• Venture Portfolio: Fair value of $44 million across eight private holdings

Additionally, the firm repurchased 935,900 of its own shares for $2.44 million, at an average price of about $2.61 per share.

Analyst Revisions and Stock Performance

Equity researchers have adjusted their stance in light of recent developments:

• Benchmark lowered its price target from $8 to $3 in November 2025 but maintained a Buy rating.
• Northland Capital Markets reduced its target from $5 to $2.50.

The share price has declined roughly 63% year-to-date, reflecting deep-seated concerns over the company's ability to deploy its core arbitrage strategy as planned within an increasingly competitive field. Trading over the past twelve months has ranged from $0.91 to $4.95, underscoring the stock's high volatility.

Moving forward, DeFi Technologies must work to stabilize both its legal position and capital market confidence in its business model, with the class action deadline and ongoing shareholding reviews presenting immediate hurdles.