SecProbe.io

CORRESP
 1
 filename1.htm

 April 14, 2025

 VIA EDGAR

 U.S. Securities and Exchange Commission

 Division of Corporation Finance

 Office of International Corporate Finance

 Washington, D.C. 20549

 Attention: Corey Jennings,
Special Counsel

 Re: Defi Technologies, Inc.

 Registration
Statement on Form 40FR12B

 Filed September
16, 2024

 Amended on January
17, 2025

 File No. 001-41056

 Dear Mr. Jennings,

 On behalf of DeFi Technologies,
Inc. (together with its subsidiaries on a consolidated and unconsolidated basis, herein referred to as, the " Company "),
we write in response to the U.S. Securities and Exchange Commission's (the " Commission " or the " SEC ")
letter dated February 19, 2025 (the " Request ") regarding the Company's registration statement on Form 40FR12B
filed with the Commission on September 16, 2024, as amended on January 17, 2025 (the " Registration Statement "). In
connection with this response to the Request, the Company is contemporaneously filing an amendment to the Registration Statement, to provide
further updates to its disclosure therein and to file additional exhibits. The Company's responses follow below in the order of
the Request.

 1. Please confirm whether the response provided to our
comment 1 is based on an unconsolidated analysis, as required by Section 3(a)(1)(C) of the Investment Company Act of 1940 (the "1940
Act"). To the extent that it was not, we reissue our prior comment and request that you:

 ● Provide a comprehensive, detailed legal analysis regarding whether the Company and each of its subsidiaries
meets the definition of an "investment company" under Section 3(a)(1)(C). In your analysis, please include all relevant calculations
under Section 3(a)(1)(C) as of the most recent fiscal quarter end, identifying each constituent part of the numerators and denominators
for each company. To the extent not previously provided, please also describe and discuss any other substantive determinations and/or
characterizations of assets that are material to your calculations"; and

 Response : The Company, on a
consolidated basis, and each of its subsidiaries on an unconsolidated basis, does not meet the definition of an "investment
company" under Section 3(a)(1)(C) of the Investment Company Act of 1940, as amended (the " Act ") given none of
these entities, "engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities,
and owns or proposes to acquire investment securities having a value exceeding 40 per centum of the value of such issuer's total
assets…on an unconsolidated basis." (the " 40% Test "). 1

 1 15 U.S. Code § 80a–3(a)(1)(C).

 As of December 31, 2024, on a consolidated
basis, the Company's total assets were $1,320,722,647. 2
The Company held $22,923,872 in cash and cash equivalents, $2,585,451 in prepaid expenses and other assets, and $802,671,212 in digital
assets ($398,364,914 of digital assets, $55,568,531 of digital assets loaned, $345,381,533 of digital assets staked and $3,356,235 of
client digital assets). In total, these assets represent approximately 63.9% of the Company's total assets. 32.2% of the Company's
assets include investment securities within the meaning of the Act. As a result, the Company does not hold more than 40% of its total
assets as investment securities and is objectively not engaged in, nor does it propose to engage in, the business of investing, reinvesting,
owning, holding, or trading in investment securities.

 The majority of the investment securities
that the Company holds are for the purposes of hedging its primary business activities offering exchange-traded products (" ETPs ").
During the second quarter of 2024, the Company purchased FTX bankruptcy estate assets, 3
for the purposes of acquiring SOL and AVAX tokens in connection with its hedging strategy. The Company's financial statements for
the period ended December 31, 2024 disclosed the following holdings within the Galaxy (Fund A) and Pantera (Fund B) funds:

 Current
 Long Term
 Total

 Quantity
 Amount
 Quantity
 Amount
 Quantity
 Amount

 Fund A - Solana (SOL)
 216,379.2216
 $ 44,442,849
 244,331.9458
 $ 50,184,152
 460,711.1675
 $ 94,627,001

 Fund A - Avalance (AVAX)
 223,905.1900
 $ 8,663,344
 707,540.4100
 $ 27,376,168
 931,445.6000
 $ 36,039,512

 440,284.4116
 $ 53,106,193
 951,872.3558
 $ 77,560,320
 1,392,156.7675
 $ 130,666,513

 Fund B - Solana (SOL)
 626,365.7000
 $ 128,651,339
 540,869.9000
 $ 111,091,072
 1,167,235.6000
 $ 239,742,411

 Total

 $ 181,757,532

 $ 188,651,392

 $ 370,408,924

 The Company holds these non-security
digital assets through special asset vehicles that distribute the underlying digital assets in accordance with a distribution schedule
(the " Distribution Vehicle Securities "). As a result, upon each distribution event (which occurs each month) (a " Distribution
Event "), the percentage of the Company's assets that constitute Distribution Vehicle Securities is reduced, thereby reducing
the overall percentage of the Company's position in investment securities. The Company's holdings of Distribution Vehicle
Securities will continue to diminish over time until all of the underlying digital assets are fully distributed and the Company will no
longer hold any Distribution Vehicle Securities. 4 The Distribution
Vehicles will complete their distributions by February 29, 2028.

 To illustrate the foregoing, as of
December 31, 2024, the Company's Distribution Vehicle Securities constituted $370,408,924 or 28% of the Company's total assets;
however, as of March 31, 2025, following the occurrence of the first three monthly Distribution Events in 2025, the Company's Distribution
Vehicle Securities constitute 23.5% of the Company's total assets on a consolidated basis. In addition, an additional 4.5%
in Distribution Vehicle Securities will be distributed in connection with the June 30, 2025 monthly Distribution Event.

 2 Unless otherwise noted, all references to currency herein refer
to Canadian dollars.

 3 Following the November 2022 collapse of FTX, the FTX bankruptcy
estate sold the remaining assets to one or more financial institutions. Subsequently, the Company purchased interests in SOL and AVAX
from these financial institutions, which structured the distribution of the underlying digital assets in special asset vehicles subject
to a distribution schedule.

 4 The Company expects the underlying assets of the Distribution
Vehicle Securities to be fully distributed by February 29, 2028.

 2

 On an unconsolidated basis,
as of December 31, 2024, the Company's subsidiaries similarly do not hold more than 40% of their assets as investment securities
and, therefore, each is not an investment company under the Act.

 Please see below for an overview the
Company's holdings on an unconsolidated basis: 5

 Defi
Technologies
Inc.
(Consolidated)
 DeFi
Technology
(Parent)
 Stillman
Digital
 Valour Inc.

 Cash and Cash Equivalents
 $ 22,923,872
 $ 2,548,288
 $ 1,662,490
 $ 18,369,192

 Client Cash Deposits
 15,346,080
 -
 $ 15,346,080
 -

 Prepaid Expenses
 $ 2,585,451
 $ 644,272
 $ 1,007,990
 $ 155,169

 Public Investments, at FVTPL
 $ 1,119,586
 $ 1,119,587
 -
 -

 Client Digital Assets
 $ 3,356,235
 -
 $ 3,356,235
 -

 Digital Assets
 $ 398,364,913
 -
 $ 8,021,370
 $ 373,047,303

 Digital Assets Loaned
 $ 55,568,531
 -
 -
 $ 55,568,531

 Digital Assets Staked
 $ 345,381,533
 -
 -
 $ 345,381,533

 Equity Investments at FVTPL
 $ 181,757,532
 -
 -
 $ 181,757,532

 Private Investments
 $ 53,740,154
 $ 51,868,922
 -
 $ 1,871,232

 Intercompany balance
 $ -
 $ 110,788,277
 -
 -

 Long term equity investments at FVTPL
 $ 188,651,392
 -
 -
 $ 188,651,393

 Long-Term Digital Assets
 $ 481,614
 $ 763,338
 -
 -

 Equipment
 $ 130
 -
 -
 $ 130

 Intangible Assets
 $ 2,104,816
 -
 -
 $ 2,104,816

 Goodwill
 $ 49,340,808
 -
 -
 $ 49,340,808

 Total Assets
 $ 1,320,722,647
 $ 167,732,684
 $ 29,394,165
 $ 1,216,247,638

 Percentage of Assets constituting Investment Securities
 32.2 %
 31.6 %
 0 %
 30.6 %

 * Investment in group subsidiaries, offset on consolidation
against shareholders' equity. Excluded from calculation.

 [ continues on next page ]

 5 Please note that (i) DeFi Holdings (Bermuda) Ltd. was dissolved
on January 6, 2025; and (ii) Electrum Streaming Inc. is in the process of dissolution, expected to be completed before April 30, 2025.

 3

 Valour
Europe AG
 Valour
Digital
Securities
Ltd.
 DeFi
Middle East
DMCC
 Reflexivity
LLC
 DeFi
Bermuda

 Cash and Cash Equivalents
 $ 121,123
 -
 $ 71,658
 $ 151,121
 -

 Prepaid Expenses
 $ 490,606
 $ 24,541
 $ 22,250
 $ 230,623
 $ 10,000

 Digital Assets
 -
 $ 16,808,728
 -
 -
 205,788

 Digital Assets Loaned
 -
 -
 -
 -
 -

 Digital Assets Staked
 -
 -
 -
 -
 -

 Private Investments
 -
 -
 -
 -
 -

 Long-Term Digital Assets
 -
 -
 -
 -
 -

 Equipment
 -
 -
 -
 -
 -

 Intangible Assets
 -
 -
 -
 -
 -

 Goodwill
 -
 -
 -
 -
 -

 Total Assets
 $ 611,729
 $ 16,833,269
 $ 93,908
 $ 381,744
 $ 215,788

 Percentage of Assets constituting Investment Securities
 0 %
 0 %
 0 %
 0 %
 0 %

 [ continues on next page ]

 4

 Provide the value of the SOL, ADA, MATIC, FIL, ATOM, SAND, MANA,
ALGO, AXS, and COTI (collectively, the "Listed Assets") held by each company.

 Response : As of December 31,
2024, the value of the Listed Assets held by each subsidiary of the Company is as follows:

 Asset
 Defi
Technologies
Inc.
(Consolidated)
 DeFi
Technologies
Inc.
 (parent)
 Stillman
Digital
 Valour Inc.

 SOL
 $ 12,452,742
 $ 0
 $ 430,013
 $ 11,770,165

 ADA
 $ 87,114,485
 $ 0
 $ 2,508
 87,031,834

 MATIC
 $ 878
 $ 0
 $ 0
 $ 767

 FIL
 $ 60,365
 $ 0
 $ 60,365
 $ 0

 ATOM
 $ 6,626
 $ 0
 $ 0
 $ 6,489

 SAND
 $ 2,146
 $ 0
 $ 0
 $ 2,146

 MANA
 $ 2,409
 $ 0
 $ 0
 $ 2,409

 ALGO
 $ 43,426
 $ 0
 $ 0
 $ 43,426

 AXS
 $ 0
 $ 0
 $ 0
 $ 0

 COTI
 $ 0
 $ 0
 $ 0
 $ 0

 Asset
 Valour
Europe AG
 Valour
Digital
Securities
Ltd.
 DeFi
Middle East
DMCC
 Reflexivity
LLC
 DeFi
Bermuda

 SOL
 $ 0
 $ 252,564
 $ 0
 $ 0
 $ 0

 ADA
 $ 0
 $ 80,143
 $ 0
 $ 0
 $ 0

 MATIC
 $ 0
 $ 111
 $ 0
 $ 0
 $ 0

 FIL
 $ 0
 $ 0
 $ 0
 $ 0
 $ 0

 ATOM
 $ 0
 $ 137
 $ 0
 $ 0
 $ 0

 SAND
 $ 0
 $ 0
 $ 0
 $ 0
 $ 0

 MANA
 $ 0
 $ 0
 $ 0
 $ 0
 $ 0

 ALGO
 $ 0
 $ 0
 $ 0
 $ 0
 $ 0

 AXS
 $ 0
 $ 0
 $ 0
 $ 0
 $ 0

 COTI
 $ 0
 $ 0
 $ 0
 $ 0
 $ 0

 2. In connection with your response to the above comment, please (i) expand on analysis of loans to
address whether they meet definition of a security because they are "notes" or "evidence of indebtedness" as referenced
in Section 2(a)(36) of the 1940 Act and (ii) to the extent not addressed in your response to the preceding question, describe the calculation
underlying your statement, provided in your Form 40-F/A, that "[a]s of June 30, 2024, approximately 5.154% of the value of our total
unconsolidated assets, exclusive of cash items, consisted of securities as defined in Section 2(a)(36) of the Investment Company Act."

 Response : Notwithstanding the
fact that the Company's loans are not securities, the Company's loans only amount to 4.2% of the Company's total assets.
As described in Item 1 above, the majority of the Company's position in investment securities is in Distribution Vehicle Securities.
This position will continue to decease over time upon each Distribution Event. As a result, it is immaterial whether the Company's
loans are securities.

 6 We note that the definition of a security under Section 2(a)(36) of the Act bears a strong
 resemblance to the definitions of a security under Section 2(a)(1) of the Securities Act of 1933, as amended (the
 " Securities Act ") and Section 3(a)(10) of the Securities Exchange Act of 1934, as amended (the " Exchange
 Act "). We therefore apply an analysis under the Exchange Act because of the analogous definitions under each framework. 3(a)(10)
of the Securities Exchange Act of 1934, as amended (the " Exchange Act "). We therefore apply an analysis under the
Exchange Act because of the analogous definitions under each framework.

 5

 Regardless, the Company's lending
activities involve short-term notes and are not securities under the test set forth in Reves v. Ernst & Young , 494 U.S. 56
(1990) (" Reves "). 6 Under Reves, the presumption
that a note is a security is rebuttable if the instrument bears a strong resemblance to one of the following: (i) notes delivered in consumer
financing; (ii) notes secured by a mortgage on a home; (iii) short-term notes secured by a lien on a small business or some of its assets;
(iv) notes evidencing a ‘character' loan to a bank customer; (v) short-term notes secured by an assignment of accounts receivable;
or (vi) notes which simply formalizes an open-account debt incurred in the ordinary course of business. To determine whether a note bears
a strong resemblance to one of the above instruments, courts and the Commission have weighed the following factors: (i) the motivations
that would prompt a reasonable seller and buyer to enter into it; (ii) the plan of distribution of the instrument; (iii) the reasonable
expectations of the investing public; and (iv) the existence of another regulatory scheme that significantly reduces the risk of the instrument,
thereby rendering the application of the Securities Act unnecessary.

 First, the Company enters into lending
transactions as a means to manage its hedging positions in connection with its ETP business and not primarily to generate a profit. The
"sellers" of the notes are sophisticated financial institutions and not operating companies that seek capital to finance their
operations or substantial investments, which, together with the Company's motivations, weigh towards the notes not being securities.
Additionally, these financial institutions do not broadly market the notes to the public, but instead make them available exclusively
to sophisticated lenders such as the Company, weighing this factor in favor of the notes not being securities. With respect to the third
factor, the parties understand that the transactions are characterized as loans and not securities because the characterization of the
notes in the lending documents. Finally, the application of U.S. securities laws is unnecessary given the transactions are with large
financial institutions that are subject to one or more regulated frameworks (e.g., money transmission, lending, and/or banking).

 Based on a balance of the foregoing
factors, the underlying loans, whether notes or otherwise, are not securities under Reves and therefore the Company's position in
these loans is immaterial to the Company's broader analysis of whether it is an investment company.

 3. In your analysis of the company under the Tonopah test, please expand your analysis as follows:

 ● With respect to the Company's analysis of the nature of its assets, identify the amount and
types of any assets held by the Company, on a consolidated basis, that the Company believes are securities. In addition, to the extent
different, please identify the amount of Listed Assets held by the Company on a consolidated basis.

 Response : As of December 31,
2024, the Company's investment securities, on a consolidated basis, include the following:

 Asset
 Value
(USD)

 Public investments, at fair value through profit and loss
 $ 1,119,586

 Private Investments, at fair value through profit and loss
 $ 53,704,154

 Distribution Vehicle Securities
 $ 370,408,924

 Total
 $ 425,268,664

 6

 ● With respect to the Company's analysis of its income, identify the amount and types of any
income-whether realized or unrealized-deriving from assets that the Company believes are securities. In addition, to the extent
different, please identify the amount of any income derived from loans or gains in Listed Assets held by the Company on a consolidated
basis.

 Response : The Company's
income, whether realized or unrealized, deriving from its position in investment securities is $143,462,994, which constitutes 26.7% of
its total gro