Figure Faces Short-Seller Challenge Over Blockchain Lending Claims

Figure Technology Solutions is in open contention with short-seller Morpheus Research after the firm published a report accusing the HELOC lender of inflating its on-chain technology adoption. Morpheus, which disclosed short positions in FIGR, described the Nasdaq-listed company as a risky home equity lender disguised as a blockchain innovator. The short-seller's core claim is that Figure's loan origination system does not actually depend on blockchain infrastructure. They pointed to Figure's own SEC filings as evidence. Morpheus also argued that several crypto-native products—Figure Connect, Democratized Prime, YLDS, and the OPEN equity network—have either lost momentum or rely on internal support to stay afloat. FIGR shares have dropped considerably, from a January peak of $78 to approximately $37 now. The company debuted on the public market in September 2025 at $25 per share, raising $787.5 million. Figure and asset manager Van Eck have both pushed back on Morpheus's findings. The dispute raises straightforward questions about how we verify blockchain integration claims in fintech. Reviewing SEC filings alongside on-chain data would be a reasonable next step for anyone assessing this situation.