DeFi Technologies Inc., a provider of exchange-traded products, has strongly criticized a “defamatory” and “misleading” report that surfaced earlier this week, attributing it to a significant 28% decline in its stock on June 18.
The report, published by crypto-focused newsletter CoinSnacks on Tuesday, alleged that the Canada-based ETP provider engaged in “questionable email campaigns” and paid crypto influencers to bolster its stock, which purportedly surged “3,400% in the past twelve months.”
In response, DeFi Technologies issued a press release on June 19 dismissing CoinSnacks’ report as lacking merit and suggested it may have been orchestrated by short-sellers aiming to manipulate the stock price, a claim refuted by CoinSnacks.
Prior to the controversy, DeFi Technologies’ shares closed at 3.10 Canadian dollars on Monday, reflecting a substantial 320% year-to-date increase, as reported by Yahoo Finance.
Following the fallout, the stock plummeted by 27.7% to 2.24 Canadian dollars by the end of trading on Tuesday but showed a minor recovery to 2.30 Canadian dollars by Wednesday, June 19.
CoinSnacks’ report suggested that DeFi Technologies utilized a combination of email campaigns and influencer promotions to bolster its stock, noting that one particular newsletter sent out 15 emails mentioning the company over a span of ten days.
The report also pointed out that the company benefited from endorsements by prominent crypto figures, Anthony Pompliano and Will Clemente, especially after DeFi Technologies acquired their joint venture, Reflexivity Research, in January.
CoinSnacks criticized the company’s marketing efforts, arguing that the resulting surge in stock price was driven by promotional activities rather than underlying business fundamentals.
“DeFi Technologies’ promotional blitz has proven to be highly effective,” CoinSnacks stated, highlighting how the influencer endorsements, media mentions, and email campaigns collectively influenced investor sentiment. The report suggested that the stock’s recent gains were not grounded in genuine market performance but rather in these promotional tactics.
DeFi Technologies Alleges Coordinated Short-Seller Attack
In its official statement, DeFi Technologies strongly criticized CoinSnacks’ report as a “‘short and distort’ type” publication, alleging it contained “defamatory, selective, inaccurate, incomplete, and misleading statements, speculation, and innuendo.”
DeFi Technologies suggested that the newsletter may have been “commissioned by short-sellers in a coordinated effort to depress the valuation” of its stock in order to benefit from covering short positions.
In response, CoinSnacks defended its report in a post on June 19, asserting, “We are not currently, nor have we ever been, paid by a short-seller to cover any company.” The publication also clarified that none of its team members held any positions in DeFi Technologies stock.
DeFi Technologies disclosed that it received an unsolicited approach from a Canadian investment bank regarding a potential bought-deal offer of US$15 million. The company described the offer as “peculiar” given its robust treasury position. Additionally, DeFi Technologies stated that the bank acknowledged in court proceedings its history of representing short-sellers.
DeFi Technologies further alleged that a hedge fund, with no prior interaction with the company, had expressed interest in the deal. Concerned about possible market manipulation by short-sellers and anticipating a potential short-seller report, DeFi Technologies reported the incident to the Canadian Investment Regulatory Organization.
