SEC Finds Filing Deficient Due to Missing Internal Controls Report
DeFi Development Corp has withdrawn its $1 billion Form S-3 registration statement with the U.S. Securities and Exchange Commission (SEC) after the regulator declared the company ineligible to use the simplified form.
The rejection was based on the company’s failure to include a management report on internal controls in its most recent Form 10-K — a key requirement for Form S-3 eligibility.
Planned Solana Treasury Faces Temporary Halt
Filed on April 25, the S-3 registration aimed to raise capital for general corporate purposes, including plans to accumulate Solana (SOL) tokens and earn staking rewards. The strategy mirrored MicroStrategy’s Bitcoin playbook, with the firm targeting SOL as a long-term reserve asset.
“The company understands it does not meet the eligibility requirements for the use of Form S-3 at this time,” stated DeFi Development Corp in its withdrawal notice.
Registration Withdrawn Under Rule 477
The firm officially requested to withdraw the registration under Rule 477 of the Securities Act, clarifying that:
- No securities were issued or sold.
- The SEC had not declared the filing effective.
- Investor protection and public interest guided the decision.
Despite the setback, the company confirmed plans to resubmit a resale registration once compliance issues are resolved.
$42 Million Already Raised for Solana Strategy
While the $1B registration is on hold, DeFi Development Corp has already raised $42 million via a private offering of convertible notes and warrants as part of its Solana initiative.
- Notes mature in 2030, with a 2.5% annual interest rate.
- Conversion depends on achieving a $100M market cap.
- Led by former Kraken executive Joseph Onorati, the firm now treats Solana as a strategic reserve asset.
Future Plans Remain Intact
Although the SEC’s decision delays the rollout, DeFi Development Corp remains committed to its Solana-focused treasury strategy. The company emphasized that unused registration fees will be credited toward a future compliant filing under SEC Rule 457(p).
Conclusion
This regulatory pause reflects the importance of financial reporting standards even in the fast-moving crypto space. With updated compliance and a solid strategy, DeFi Development Corp appears poised to relaunch its Solana investment plan in alignment with SEC rules.