Exchange-traded product provider DeFi Technologies Inc. has slammed a “defamatory” and “misleading” report earlier this week that claimed its stock “isn’t rallying for the right reasons” — tanking its shares by nearly 28% on June 18.
Crypto-focused newsletter CoinSnacks’ Tuesday report claimed the Canada-based ETP provider launched “questionable email campaigns” and paid crypto influencers to promote the stock — which saw its stock rise “3,400% in the past twelve months.”
In a June 19 press release, DeFi Technologies said CoinSnacks’ report “lacks merit” and accused it of being “commissioned by short-sellers” to deliberately tank the stock — which CoinSnacks denies.
DeFi Technologies’ share price closed on Monday at 3.10 Canadian dollars — having seen a nearly 320% year-to-date gain at that point, according to Yahoo Finance.
By Tuesday’s close, it had dropped 27.7% to 2.24 Canadian dollars but slightly recovered on Wednesday, June 19, to close at 2.30 Canadian dollars.
CoinSnacks’ report claimed DeFi Technologies paid for an email and influencer campaign to promote its stock, alleging one newsletter sent 15 emails mentioning the company over ten days.
It alleged that the company also got publicity boosts from high-profile crypto figures Anthony Pompliano and Will Clemente. DeFi Technologies bought their joint venture, Reflexivity Research, in January.
“The problem for DeFi Technologies really is that their promotional IR blitz has worked out so well,” CoinSnacks wrote.
“Between the influencer pumps, getting mentioned on CNBC, the email campaigns, and Pomp pomping, there is now strong evidence that the stock isn’t rallying for the right reasons.”
“Coordinated effort” by short sellers
In its press release, DeFi Technologies slammed CoinSnacks’ “‘short and distort’ type report,” saying it had “defamatory, selective, inaccurate, incomplete and misleading statements, speculation, and innuendo.”
It believed the newsletter was “possibly commissioned by short-sellers in a coordinated effort to depress the valuation” of its share price “to cover short positions.”
CoinSnacks defended its report in a June 19 X post, saying, “We are not currently, nor have we ever been, paid by a short-seller to cover any company” and that none of its team held positions in DeFi Technologies stock.
Related: DeFi Technologies launches Core chain validator, stakes 1,498 Bitcoin
DeFi Technologies claimed it was “approached unsolicited by a Canadian investment bank” over a “potential bought-deal offer of US$15 million.”
It said the offer was “peculiar” as the firm has a “strong treasury.” It added the bank had admitted in court it “had a history of acting for short-sellers” and claimed a hedge fund — “which had never met the Company” — was interested in the deal.
The company said it contacted the Canadian Investment Regulatory Organization over the bank’s offer and warned it of “the potential for market manipulation by short-sellers” and a possible short-seller report.
X Hall of Flame: Ethereum’s recent pullback could be a gift — Dynamo DeFi