What Sparked the ?

Morpheus Research dropped a bombshell report this week. They say Figure is not the blockchain innovator it claims to be. Instead, they call it a plain old home equity lender hiding behind buzzwords. Morpheus revealed they hold short positions in Figure’s stock, ticker FIGR on Nasdaq.

The report digs deep. It points to Figure’s SEC filings to argue that loan origination skips blockchain entirely. Products like Figure Connect, Democratized Prime, YLDS, and the OPEN equity network? Morpheus claims they are stalled or just internal tricks.

Figure’s stock has taken a hit. From a peak of $78 in January, it now hovers around $37. The company went public in September 2025 at $25 per share, raising $787.5 million. Pressure is building as this feud heats up.

Figure Fires Back: Blockchain is Core to Our Loans

Figure didn’t stay quiet. They hit back on X (formerly Twitter), calling the report a big misunderstanding. “Blockchain is fully integrated into our loan lifecycle,” they said.

Yes, some legal steps for HELOCs (home equity lines of credit) need old-school paper docs to follow rules. But once funded, loans live on blockchain. Every ownership transfer and pledge happens on-chain. Ecosystem players must use blockchain by contract. It’s the true record keeper, with paper just for legal show.

Figure also defended loan health. Delinquency rate? Just 0.80% on $4.6 billion in securitized assets. Borrowers are top-tier: average FICO score of 754, income around $187,000, and loan-to-value ratio of 62%.

Demand is strong too. In March 2026, they sold over $1.15 billion in whole loans on their marketplace. A recent auction hit a record-low spread to the risk-free rate.

Expert Weighs In: Defending Figure’s Tech Edge

Matthew Sigel, head of digital assets at Van Eck, jumped in to back Figure. He says the short seller misses how blockchain really works. They fixate on old process problems that Figure solved long ago.

Sigel spotlights Figure’s Digital Asset Registry Technology (DART). It swaps out the outdated MERS paper system for a digital one on Provenance Blockchain. APIs link it to big data aggregators, recording liens securely.

Underwriting is a game-changer too. Figure’s model cuts costs to $700 per loan, versus $11,000 for traditional banks. Q1 data shows marketplace volume at $2.9 billion, up 113% from last year.

Provenance Blockchain Under Fire

Morpheus didn’t stop at loans. They attacked Provenance Blockchain, Figure’s Layer 1 network. Claims say Figure, affiliates, and co-founder Mike Cagney control over 65% of HASH tokens. A few accounts could halt the chain.

Figure pushes back: They hold just 25% of HASH. Governance involves a wider group for big decisions.

Cagney, who started Figure in 2018, sold $64 million in stock post-IPO at $28.50 average. Morpheus flags this. Figure says sales followed pre-set plans or tax needs from vesting.

Why This Matters for Crypto Investors

This isn’t just company drama. It’s a test for blockchain in real finance. Can fintechs blend crypto tech with regulated lending? Figure says yes, proving efficiency and transparency. Short sellers like Morpheus bet no, smelling overhype.

Watch FIGR stock closely. Delinquency stats, sales volumes, and governance details will decide winners. For blockchain fans, Figure’s model could pave the way for more on-chain assets.

• Key Stats:
• Delinquency: 0.80%
• Assets: $4.6B
• Avg FICO: 754
• Avg Income: $187K
• LTV: 62%
• March Sales: $1.15B
• Q1 Volume: $2.9B (+113% YoY)
• Loan Cost: $700 vs $11K traditional

The Bigger Picture in Blockchain Lending

HELOCs on blockchain? It’s revolutionary. Traditional lending is slow and costly. Figure uses smart contracts for instant transfers and clear ownership. This cuts fraud and speeds markets.

Regulators watch closely. Compliance is key, hence the hybrid paper-blockchain setup. As rules evolve, pure on-chain lending could boom.

Investors: Look beyond the noise. Figure’s numbers shine. If they deliver growth, shorts may cover. Provenance Blockchain’s decentralization will prove critics wrong.

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