Commodity exchange operator Abaxx Technologies on Wednesday rejected allegations of wash trading and fabricated market activity made by short seller Viceroy Research, saying it had contacted regulators in Canada and Singapore.
Abaxx’s shares had fallen to C$35.84 by Tuesday’s close, down from the C$54.25 price at which the company closed a C$69 million bought deal financing earlier this period.
Viceroy published two reports on June 11 and June 12 alleging that Abaxx Exchange’s trading activity was incentive-driven churn that collapsed when incentives were switched off, and that the exchange itself was an off-the-shelf product.
In its response, Abaxx said its market maker and liquidity provider incentive programs are standard for new futures markets. It said the exchange has surveillance and disciplinary processes, with trading data published daily and distributed through LSEG and TradingView.
“Market making and liquidity provider programs are run by every exchange and are instrumental in how new futures markets are built,” the company said.
Abaxx also said Viceroy overstated its net cash burn rate by more than 50% over the past two reported quarters, and described its financial position as secure following the C$69 million raise.
The company scheduled an investor update call for Thursday.
