DeFi Technologies Faces Mounting Legal Challenges

DeFi Technologies CA24464X1069

The Canadian digital asset firm DeFi Technologies is confronting a growing wave of legal action. Multiple U.S. law firms have initiated or announced class action lawsuits against the company, centering on a severe reduction in its 2025 revenue forecast, significant share price declines, and alleged mismanagement of risks within the competitive decentralized finance (DeFi) landscape.

At least three law firms specializing in securities litigation—Pomerantz LLP, Levi & Korsinsky, and the Rosen Law Firm—have filed or publicized their intent to pursue class actions against the company and certain executives. The lawsuits focus on the period between May 12, 2025, and November 14, 2025.

Plaintiffs allege violations of U.S. securities laws, specifically Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The central accusations include:
* A failure to disclose delays in implementing the company's DeFi Alpha arbitrage strategy.
* Alleged misrepresentation of the competitive pressures from other Digital Asset Treasury (DAT) companies.
* Downplaying the negative operational impact of these developments.
* Issuing a misleading revenue outlook for the 2025 fiscal year.

The forthcoming legal proceedings will determine whether investors suffered losses due to incomplete or deceptive information.

Share Price Plunge Follows Drastic Forecast Cut

Investor pressure intensified following the release of third-quarter 2025 results on November 14. The company reported a revenue decline of nearly 20%, missing market expectations. The pivotal event, however, was a dramatic reduction in its full-year guidance.

Management slashed its 2025 revenue forecast from $218.6 million to approximately $116.6 million—a cut of almost 47%. Executives cited delays in capitalizing on planned DeFi Alpha arbitrage opportunities, attributing the setback to increased competition from DAT firms and a convergence in digital asset price movements during the latter half of 2025.

Market Reaction in November

Equity markets reacted in two distinct phases:
* November 6, 2025: Following initial indications of rising DAT competition, the share price fell by $0.13, or 7.43%, to close at $1.62.
* November 17, 2025: After the Q3 report and the severe guidance reduction, shares dropped a further $0.40, or 27.59%, ending the session at $1.05.

The confluence of weak quarterly results, a slashed outlook, and heightened competition precipitated these substantial losses.

Leadership Change and Analyst Downgrades

Coinciding with its quarterly earnings, DeFi Technologies announced a shift in leadership. Co-founder Olivier Roussy Newton stepped down from the CEO role, transitioning to an advisory position. This management change, occurring alongside sharply lowered expectations, amplified uncertainty regarding the company's near-term strategic direction.

Price Targets Sharply Lowered

Equity researchers adjusted their models in response to the new information:
* Benchmark analyst Mark Palmer reduced his price target from $8 to $3, while maintaining a "Buy" rating.
* Northland Capital cut its target from $5 to $2.50, reiterating an "Outperform" rating but explicitly citing DeFi Alpha delays as a primary concern.

These revised targets reflect the deteriorated revenue profile and operational uncertainty, even as the formal investment ratings remain positive.

Lead Plaintiff Deadline Approaches

Investors who purchased DeFi Technologies shares during the specified class period may join the consolidated action. The deadline to petition the court for appointment as lead plaintiff is January 30, 2026.

The case is proceeding under the caption Linkedto Partners LLC v. DeFi Technologies Inc., et al., No. 25-cv-06637 in the United States District Court for the Eastern District of New York. The outcome of this litigation, whether through settlement or judgment, will ultimately determine the financial repercussions for the company and affected shareholders.