DeFi Technologies Faces Investor Lawsuits Following Sharp Forecast Cut

DeFi Technologies CA24464X1069

DeFi Technologies is confronting a severe crisis of confidence as a disastrous quarterly earnings report has been followed by a wave of legal action. Multiple U.S. law firms have now filed class-action suits, alleging securities fraud by the company's leadership. This dual shock raises fundamental questions about the firm's stability in the wake of its recent performance collapse.

The immediate catalyst for the current turmoil was the company's third-quarter results. Revenue for the period fell by approximately 20% to $22.5 million. However, the true shock to investors came from a dramatic revision to the full-year outlook. Management slashed its 2025 revenue forecast from $218.6 million to just $116.6 million, a reduction of nearly half.

This forced a complete market reassessment. Company leadership attributed the shortfall to saturation in the digital assets sector, stating that the lucrative arbitrage opportunities central to its "DeFi Alpha" trading strategy had been "absorbed or delayed" by mounting competition.

Legal Challenges Mount

On Wednesday, December 10, 2025, the situation escalated legally. Several firms specializing in shareholder rights, including Johnson Fistel and Faruqi & Faruqi, filed lawsuits against the company. The litigation focuses on the period between May and November 2025.

The allegations are serious. Plaintiffs accuse executives of concealing material adverse developments concerning the core "DeFi Alpha" strategy. They claim that while internal challenges from operational delays and intensifying competition were mounting—making projected returns unachievable—the company's public communications remained inappropriately optimistic.

Leadership Shake-Up Adds to Instability

Compounding the uncertainty is a sudden change in the executive suite. Merely three days after the poor earnings release, on November 17, 2025, CEO Olivier Roussy Newton announced his resignation, transitioning to an advisory role.

Although a successor, Johan Wattenström, was named immediately, the market perceived the timing of this leadership change in the midst of a crisis negatively. The stock had already reacted to the chain of events in November with a steep decline of 27.6%.

Wattenström now faces the formidable task of steering the company toward a sustainable future. He must demonstrate that the business can survive in a saturated market without the previously relied-upon arbitrage gains. The path to recovery appears arduous, given the ongoing lawsuits and a significant erosion of investor trust.