Longfin (LFIN) saw its stock price plummet on Tuesday following news that FTSE Russell is planning on removing the company from the Russell 2000 and 3000 Indices after only two weeks of inclusion. The FTSE stated that Longfin failed to meet the minimal requirement of having at least 5 percent of company shares available to the public, as only 2.5 percent of its shares are currently in circulation.

The New York-based firm’s stock price skyrocketed in December after it announced its acquisition of Ziddu.com, a marketplace for smart contracts. The announcement, which touted Longfin’s ties to the blockchain world, came just two days after the company’s IPO, sending the stock price from $5 to as high as $73.

The meteoric rise mirrored a recent Wall Street trend where companies’ stock prices surge following the slighted hint of blockchain adoption. A few other notable names that have benefited from this ‘crypto craze’ include Overstock.com and Kodak, companies that have announced major shifts to focus on blockchain asset development.

It did not take long for Longfin’s price to return to earth following the pump. Longfin’s CEO, Venkat Meenavalli, incited the initial stock plummet on Monday with a shaky defense of the company’s Ziddu.com acquisition, during a CNBC interview. Since that time, the stock price has settled down from over $70 to around $17, representing a $1.2 billion market cap.

Yahoo Finance

Citron Research, a short-selling firm led by Andrew Left, has since weighed in with a tweet, saying “@sec_enforcement should not be far behind. Filings and press releases are riddled with inaccuracies and fraud.”

Lijie Zhu of Dragon Gate Investment Partners, Longfin’s investor-relations firm, told Bloomberg Technology, “We don’t see any fraud.”

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More: Crypto Stock Longfin Extends Slide After Russell Index Ouster


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