Every once in a while, a regulatory move sends ripples through crypto, and the SEC’s recent halt of a $1 billion Solana-focused equity raise by DeFi Development Corp is one such moment. In April 2025, DeFi Development—originally a real estate financing firm known as Janover—filed a Form S-3 to streamline raising capital. The goal was bold: to use the funds for general corporate purposes and build a sizable Solana treasury, echoing MicroStrategy’s strategy with Bitcoin.
But in mid-June, the SEC stepped in. Officials determined DeFi Development wasn’t eligible for the S-3 form because their latest 10-K lacked a mandatory internal control over financial reporting report—a non-crypto technicality with major implications. This discovery triggered a withdrawal of the registration on June 11, a swift move by the company citing investor protection.
Despite this regulatory speed bump, DeFi Development remains firmly committed to its strategy: holding over 600,000 SOL tokens valued at roughly $97 million, leveraging Solana staking via liquid staking instruments, and plotting a second shot at a capital raise—this time through a resale registration after fixing its compliance gaps.
In one fell swoop, the SEC reminded the crypto world that regulatory nuances, not just blockchain innovation, can make or break a deal. For institutional crypto allocators or public-market crypto firms, this episode underscores how traditional governance frameworks still matter deeply—even for alt-asset strategies.
What Is a Form S-3—and Why It Matters
When a company wants to tap into U.S. public markets without the heavy lift of an IPO, Form S-3 offers a streamlined route. Unlike the exhaustive S-1 filing required for companies going public for the first time, S-3 is a more efficient method reserved for established issuers. It works like a shelf: once registered, a company can periodically tap it to issue new stock, bonds, or other securities without refiling from scratch—a major advantage for teams seeking agile capital strategies.
To use an S-3, companies must meet rigorous eligibility benchmarks. The firm must be a U.S.-based, publicly reporting entity that has filed all required SEC reports—like quarterly 10-Qs and annual 10-Ks—on time for at least the previous year. It must also have a market float of at least $75 million held by non-affiliates and no recent dividends or debt defaults. Once these conditions are satisfied, the company can benefit from forward incorporation by reference, meaning any updates in its regular SEC filings automatically flow into the S-3 filing without starting anew.
There’s another, less obvious eligibility condition: internal controls. Under the Sarbanes-Oxley Act, specifically Section 404, publicly listed companies must include a management-certified internal control report as part of their annual filings. This report confirms that executive leadership—often the CEO and CFO—have implemented systems to ensure accurate financial reporting and that these systems have been audited. Without that confirmation, a Form S-3 is off-limits.
That precise omission is what tripped up DeFi Development. Their April 25 filing was clean in many respects, but it lacked a management’s internal control report in their 10-K. The SEC viewed that absence not as a formality but as a critical compliance failure, rendering the filing ineligible and leading to a formal withdrawal request on June 11, 2025.
Understanding Form S-3 is more than procedural—it’s a lens into how deeply U.S. capital markets enforce governance. For any crypto firm planning to enter the public sphere, this isn’t a formality. It’s the gatekeeper ensuring companies adhere to standards designed to protect investors and maintain market integrity.
Timeline: From Filing to Withdrawal
In late April, DeFi Development Corp., freshly rebranded from Janover, officially submitted its Form S-3 registration with the SEC. Filed on April 25, 2025, the statement proposed raising up to $1 billion aimed at general corporate purposes, including accumulating more Solana tokens for its treasury strategy.
Throughout May, the company continued building its Solana position. Behind the scenes, former Kraken executives had injected fresh leadership and capital, with DeFi Dev now holding over 609,000 SOL—around $97 million at prevailing prices—acquired across eleven transactions, the latest on May 15.
As the SEC reviewed the filing in June, a technical yet critical issue emerged. SEC staff noted that DeFi Development had failed to include the required internal controls report in its most recent Form 10-K, a mandatory disclosure under Sarbanes-Oxley for S-3 eligibility.
With no declaration of effectiveness and no securities issued, the company formally moved to withdraw the filing on June 11, 2025. The letter filed under Rule 477 stated the withdrawal aligned with “the public interest and the protection of investors,” and flagged its plan to come back with a resale registration once compliance has been met.
In just six weeks—from filing to withdrawal—the episode dramatically exposed how compliance minutiae can derail high-stakes crypto finance initiatives. DeFi Development’s recalibrated steps now hinge on closing its internal control disclosures before making its next move in the public markets.
The SEC’s Concern: Missing Internal Controls Report
When the SEC flagged DeFi Development’s Form S-3, it wasn’t because of anything flashy like its business model or Solana ambitions. The issue boiled down to one critical omission: the mandatory internal controls report.
That report, a core requirement under the Sarbanes-Oxley Act, mandates that a company’s CEO and CFO certify both the accuracy of its financial statements and the soundness of its internal control systems. It also requires an auditor’s attestation that management has effective internal financial controls. DeFi Development’s filing conspicuously lacked this report in its Form 10-K, making it ineligible to proceed with an S-3 registration.
By mid-June, SEC staff communicated that without this report, DeFi Development failed to meet S-3 eligibility. This isn’t a minor technicality—they must show solid, documented internal controls to protect investors and safeguard market integrity. As a result, on June 11, DeFi Development withdrew the filing under Rule 477, explicitly citing the lack of this critical disclosure.
The SEC’s stance here is clear: regardless of how novel or blockchain-related a company’s strategy may be, any public-market ambition must meet traditional standards. Omitting internal control reports isn’t a harmless oversight—it’s a compliance failure that can derail major funding plans.
Disclosure: Solana Treasury Strategy
When DeFi Development filed its $1 billion raise in April, it wasn’t just any capital ask—it was a bold declaration of intent to build a Solana treasury at scale. The company’s communications are crystal clear: they’re actively embracing Solana as more than a digital asset—they’re treating it like real estate or gold.
Among the clearest signals, a mid-May announcement disclosed their 11th purchase: 16,447 SOL at an average of $139.66, bringing total holdings to 609,190 SOL valued around $107 million at the time. Just weeks later, in early July, they added another 17,760 SOL for approximately $2.7 million—taking total holdings to about 640,585 SOL worth $98.1 million.
But accumulation isn’t their whole story. DeFi Development doesn’t hold SOL passively—they stake it. The company has deployed its own validator nodes, and stakes tokens across other validators to earn network rewards, embedding themselves into Solana’s infrastructure.
CEO Joseph Onorati recently described their approach as offering flexibility and structure to scale SOL-per-share and compound validator yield. They’ve complemented this with debt facilities: a $5 billion line of credit dedicated to SOL purchases, and a $100 million convertible note offering due 2030 aimed at both share buybacks and further SOL accumulation.
SOL-per-share is now a key internal metric. As of July 3, SOL-per-share equates to about 0.042 SOL, worth around $6.65 based on that day’s share count of 14.74 million. That metric makes their strategy tangible: each share effectively represents real Solana exposure, with yield baked in.
Still, this approach carries volatility and regulatory risks. Their S-3 filing warned that Solana price swings could sharply impact their stock. The SEC filings also flagged potential reclassification risk: if Solana is deemed a security or their holdings cross certain thresholds, they could fall under Investment Company Act rules or face asset classification issues.
Broader Implications for Public Crypto Companies
The SEC’s move to reject DeFi Development Corp’s S-3 filing sends a loud and clear message to all crypto-native firms aiming for the public stage: blockchain innovation does not exempt companies from conventional financial governance. Compliance isn’t optional—it’s foundational.
Critically, this regulatory hiccup wasn’t about DeFi or Solana. It was about internal control reports and governance diligence. Many public crypto firms have focused on token mechanics, network scalability, and ecosystem growth—but investors and regulators are now scrutinizing whether those firms can deliver audited financials, security controls, standardized disclosure, and oversight systems that mirror mature corporate benchmarks.
Institutional investors are paying attention. Fetching yield through staking, token accumulation, or treasury strategies may elevate returns—but missing control reports or governance gaps can undo entire offerings, as DeFi Development now knows. In a sense, its rise and stall is a case study in how deeply rooted SEC expectations are in corporate-grade internal infrastructure.
For public crypto companies or those planning public-market access, this means three key takeaways: Executives cannot treat governance as a box-ticking afterthought. Regulatory readiness is a continuous process. And investor communication must integrate crypto strategy with compliance narrative.
What DeFi Dev Corp Plans Next
Now that DeFi Development has withdrawn its Form S-3, the company is already laying the groundwork for a second attempt—one that squares decisively with SEC expectations.
The firm has announced plans to submit a resale registration statement once it resolves its internal control deficiencies. This approach shifts the legal framing: instead of seeking to register new shares and securities directly, DeFi Development will initially register the resale rights of previously issued PIPE shares and warrants. This bypasses the S-3 eligibility hurdle and adheres to SEC requirements without another shelf misstep.
To make that happen, executives will need to address their Sarbanes-Oxley compliance gap. That means publishing a management-certified SOX 404 report confirming internal control systems are in place and audited—likely by a PCAOB-recognized auditor.
Meanwhile, the firm is advancing its treasury operations. In late June they became the first publicly traded company to adopt Solana liquid staking by converting a portion of their SOL into dfdvSOL via Sanctum, merging yield-generating architecture with liquidity flexibility.
At the same time, DeFi Development is executing a $5 billion equity line of credit with RK Capital. That’s an open-ended facility allowing stock sales over time—a flexible lever to fund future SOL purchases or corporate initiatives with discipline.
So the roadmap is in place: shore up internal controls, file resale registration, then use both liquid staking and equity credit tools to scale Solana exposure dynamically. This staged strategy shows a strong commitment to regulatory compliance alongside execution.
Investor Takeaways
For investors watching DeFi Development’s slide into regulatory trouble, this episode is rich with lessons that go beyond crypto buzzwords.
Token accumulation is not financial readiness. Compliance is. Transparency matters. And regulatory delays have real opportunity costs. DeFi Development’s roadmap is not doomed—it’s simply on hold until governance meets ambition. How they resolve that tension will define whether their Solana bet becomes a public-market benchmark or just another cautionary tale.
SEC Disqualifies $1B DeFi Dev Corp Filing: What It Means for Public Crypto Companies
DeFi Development’s withdrawal of its $1 billion Form S-3 isn’t the end of its journey—it’s a crucial course correction. This moment has elevated the importance of corporate governance standards over headline-grabbing token tactics.
Their plan to file a resale registration filing once they shore up SOX-compliant internal controls shows a clear path forward. Meanwhile, their aggressive SOL treasury strategy—bolstered by staking, liquid staking adoption, and a $5 billion credit line—continues to unfold in parallel.
For investors and institutional allocators, this episode is a signal flare: market innovation and blockchain exposure must be matched step-for-step with reliable financial controls, transparent disclosures, and audit-grade compliance frameworks.
The story isn’t over—it’s evolving. DeFi Development’s next filings will be closely watched as a bellwether. They hold a template for how crypto firms can weave digital asset strategies into institutional-grade capital structures, transparent oversight, and regulatory trust.
