Governance Concerns and Latin American Growth Collide for DeFi Technologies

DeFi Technologies CA24464X1069

DeFi Technologies finds itself navigating a complex landscape where strategic growth initiatives are being scrutinized alongside pressing internal governance matters. The company's recent expansion into Brazil's substantial crypto market is now competing for investor attention with regulatory inquiries and board-level changes, creating a pivotal moment for the firm's credibility.

On December 19, DeFi Technologies marked a significant milestone with a bell-ringing ceremony at the B3 exchange in São Paulo. The event celebrated the listing of its Brazilian Depositary Receipts (BDRs) under the ticker DEFT31, alongside five Valour Exchange Traded Products (ETPs). Trading on B3 had commenced two days earlier, on December 17.

The newly listed ETPs provide exposure to major digital assets, including Bitcoin (BTCV), Ethereum (ETHV), and Solana (VSOL). This move grants the company direct access to Brazil's burgeoning cryptocurrency economy, which is estimated to be worth approximately $319 billion. The launch represents a deliberate expansion of DeFi Technologies' presence in a Latin American region where digital assets have gained considerable traction.

Regulatory Scrutiny and Board Resignation

Simultaneously, the company is addressing governance issues that have attracted regulatory oversight. A disclosure on December 22, released at the request of the Ontario Securities Commission (OSC), detailed ongoing discrepancies between share positions held by certain broker-dealers and the records of central depositories like the DTC and CDS.

An investigation into these inconsistencies, conducted in partnership with Shareholder Intelligence Services, has been underway since June. DeFi Technologies has stated it does not believe the discrepancies impacted shareholder voting at the 2025 Annual General Meeting. Nevertheless, the OSC's involvement underscores a layer of regulatory pressure.

Compounding this situation was the immediate resignation of board member Stefan Hascoet, confirmed in the same period. Hascoet had served on the board since June 2023. His departure occurs as the company works to strengthen its capital market structure and operates under heightened observation.

A Challenging Backdrop of Lowered Expectations

These developments follow a difficult period for investor confidence. In mid-November, a leadership change saw co-founder Johan Wattenström replace Olivier Roussy Newton as Chief Executive Officer.

Shortly before this transition, the company significantly revised its revenue forecast for fiscal 2025 downward. The projection was cut from an initial $218.6 million to approximately $116.6 million, a substantial correction that reset growth expectations. The confluence of governance questions, executive turnover, and strategic expansion is now being critically assessed by the market.

The current phase is characterized by a "show-me" attitude, with stakeholders awaiting concrete evidence that the business model is becoming more predictable under new leadership and that its capital market framework is stable.

Focus for the Coming Months

In the near term, market attention will likely center on the progress of the share discrepancy review. A key factor will be whether DeFi Technologies can present definitive findings from this probe in the first quarter of 2026 and what remedial actions may follow.

Operationally, the performance of the Brazilian venture will move into focus. Analysts will seek clarity on whether the DEFT31 BDR listing and the new ETPs on B3 can generate sufficient trading volume and revenue in early 2026 to help offset the lowered revenue guidance.

For the company's share price, the ability to stabilize above recent support levels will be crucial. The twin pillars of revenue generation from Brazil and the resolution of governance matters will form the core of the investment thesis through the first half of 2026.