Gate News message, April 17 — Figure Technology Solutions came under fire this week after short-seller Morpheus Research published a detailed report accusing the Nasdaq-listed blockchain-focused HELOC lender of overstating its use of on-chain technology. Morpheus, which disclosed short positions in FIGR, called Figure “little more than a risky home equity lender masquerading as a blockchain innovator,” alleging that its loan origination system does not rely on blockchain and that its crypto-native products have stalled or are internally propped up. FIGR shares have declined sharply from a January high of $78 to approximately $37 as of April 17.
Figure responded on X, acknowledging that certain legal requirements for HELOCs still necessitate traditional documentation for regulatory compliance, but stating that once funded, loans are represented on blockchain with all subsequent ownership transfers and pledges recorded on-chain. The company cited a weighted-average delinquency rate of 0.80% across roughly $4.6 billion in securitized assets, an average borrower FICO score of approximately 754, average income of around $187,000, and a combined post-loan-to-value ratio of about 62%. Figure also reported over $1.15 billion in whole loan sales executed on its marketplace in March 2026 alone, with a recent loan auction achieving a record-low spread to the risk-free rate.
Matthew Sigel, head of digital assets research at Van Eck, offered a separate defense, arguing that the bear case relies on a “fundamental misunderstanding of how blockchain features actually work.” Sigel highlighted Figure’s Digital Asset Registry Technology (DART), which replaces the legacy MERS paper registry with an active digital system, and noted that Figure’s deterministic underwriting model has compressed production costs to roughly $700 per loan compared with an $11,000 average for legacy banks. Preliminary Q1 operating data showed marketplace volume of $2.9 billion, up 113% year over year.
Morpheus also alleged that Figure, its affiliates, and co-founder Mike Cagney collectively control over 65% of the Provenance Blockchain’s native HASH governance token. Figure countered that it holds approximately 25% of outstanding HASH tokens and that key decisions are made through a broader governance framework. Cagney has sold roughly $64 million worth of stock since the September 2025 IPO at an average price of $28.50, according to the Morpheus report; Figure said the sales occurred pursuant to standard pre-established trading plans and stock vesting-related tax obligations.
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