Fintech-Turned-Crypto Firm Tumbles as Citron Alleges Fraud

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(Bloomberg) -- Longfin Corp., a fintech company whose stock surged 2,600 percent after it touted ties to cryptocurrencies, has fallen victim to the naysayers.

Shares of the New York City-based company plummeted as much as 14 percent to $61.50, the most intraday in more than a month, after short seller Citron Research alleged in a tweet that Longfin is a “pure stock scheme.”

“@sec_enforcement should not be far behind,” said Citron, which is run by Andrew Left, in the tweet Monday. “Filings and press releases are riddled with inaccuracies and fraud.”

“We don’t see any fraud,” said Lijie Zhu of Dragon Gate Investment Partners, Longfin’s investor-relations firm, in a phone call.

Longfin drew scrutiny in December after Chief Executive Officer Venkat Meenavalli got into a heated debate with news anchors during a CNBC interview. He said at the time that the firm’s surging market value was “insane” and “not justified.”

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