DeFi Technologies Navigates Legal Challenges Amid Global Product Rollout

DeFi Technologies CA24464X1069

While announcing significant progress in its international growth strategy, DeFi Technologies finds itself confronting mounting legal pressure from shareholder class actions. The company is launching new leveraged cryptocurrency exchange-traded products (ETPs) in Europe and a Brazilian Depositary Receipt (BDR) program, even as allegations concerning misleading statements and a substantial revenue forecast cut weigh on investor sentiment.

The operational expansion unfolds against a backdrop of legal challenges. Last Thursday, multiple shareholder rights firms, including The Gross Law Firm and ClaimsFiler, announced the filing of class action lawsuits against DeFi Technologies.

The litigation stems from the company’s reported third-quarter 2025 results, released in November, which revealed:
* Quarterly revenue of $22.5 million, a figure that fell substantially short of analyst expectations.
* A subsequent reduction of the full-year 2025 revenue forecast by over $100 million.
* A sharp decline in the share price, which currently trades near $0.99.

The suits allege that the company and other defendants made materially false or misleading statements regarding the reliability and scalability of its "DeFi Alpha" arbitrage trading desk. The combination of the weak Q3 performance and the lowered guidance triggered a notable loss of market confidence.

Strategic Growth Initiatives Press Ahead

Undeterred by the legal headwinds, the firm is actively broadening its ETP offerings and market presence to diversify its revenue streams.

European Launch of Leveraged ETPs
A subsidiary, Valour Inc., listed constant leveraged Bitcoin and Ethereum ETPs on the Spotlight Stock Market on Thursday. These products are designed to provide both retail and institutional investors in the Nordic region with amplified exposure to the two largest cryptocurrencies, targeting strong local demand for sophisticated trading tools. Valour aims to solidify its position as a European digital asset ETP provider and attract more active traders, who typically generate higher, transaction-based fees.

Brazilian Market Entry
Separately, DeFi Technologies marked its entry into the Brazilian market with a Closing Bell ceremony at the B3 exchange in São Paulo. Brazilian Depositary Receipts (BDRs) under the ticker DEFT31 became tradable last Wednesday. This offering grants Brazilian institutional and qualified investors access to the underlying common shares in local currency, eliminating the need to establish international settlement infrastructure. Company leadership cited Brazil's robust crypto activity—approximately $319 billion in digital asset volume last year—as a key rationale for the listing.

A Business Model at a Crossroads

The company's trajectory highlights a growing divergence between its assets under management and its stock market valuation.

Assets Near Record Highs
Despite the earnings miss, Assets Under Management (AUM) remain robust at approximately $1.1 billion, hovering near record levels. Sustained inflows into Valour's products suggest underlying demand for the investment vehicles remains healthy, independent of short-term earnings volatility.

Scrutiny on Earnings Quality
Market focus has sharpened on the quality of the company's revenue. The volatile earnings from the "DeFi Alpha" arbitrage business are now contrasted against the more predictable management fees generated by the ETP suite. The significant Q3 shortfall exposed the risks of the arbitrage strategy that had previously bolstered results.

New Leadership Tasked with Restoring Confidence
The newly appointed CEO, Johan Wattenström, faces the challenge of rebuilding investor trust. A central part of his mandate will be to demonstrate that the expanding ETP portfolio—including the new European leveraged products and the Brazilian BDR—can generate sufficient stable, recurring revenue to offset the fluctuations from the proprietary trading operations.

Market Outlook and Key Monitoring Points

The company's shares are currently consolidating just above the psychologically significant $1.00 level. Fundamentally, the global expansion argues for long-term potential, yet the class actions and the recent memory of the guidance cut act as brakes on any rapid recovery.

In the near term, three critical factors will be in focus:
* Trading volumes and investor uptake of the new BDRs in Brazil.
* Demand for the leveraged Bitcoin and Ethereum ETPs in Europe.
* The performance of the "DeFi Alpha" business and the proportion of stable fee-based revenue.

Volume and revenue data from these new initiatives, coupled with the January 2026 deadline for appointing lead plaintiffs in the class actions, will be pivotal in determining whether the current low share price persists or gives way to a gradual re-rating.