Abaxx Technologies this week asked regulators to investigate what it says was manipulative trading tied to a short-seller report from Viceroy Research. The request, first reported by Crypto Briefing, follows a public attack by the well-known short seller that hit the company's stock price and raised questions about the tactics used. The outcome could shape how exchanges and regulators treat short-seller campaigns that rely on more than just fundamental analysis.
Behind the Viceroy report
Viceroy Research is no stranger to crypto-adjacent companies. It has a track record of publishing negative reports that often trigger sharp sell-offs. The firm's latest target was Abaxx, which operates a derivatives exchange focused on commodities and digital assets. Viceroy's report — published without naming its sources — alleged undisclosed risks and governance issues. Abaxx called the claims misleading and said they were designed to profit from a subsequent stock drop.
Short-seller attacks aren't new, but the line between legitimate criticism and market manipulation is blurry. Regulators have long grappled with how to police reports that mix factual holes with narrative. Abaxx's probe request forces that question back into the spotlight.
Why Abaxx is pushing for a formal investigation
The company isn't just issuing a denial. It's asking a regulatory body — the article doesn't specify which one — to open a formal investigation into the trading activity around the Viceroy report. That's a step beyond the typical rebuttal. By seeking a probe, Abaxx is betting that a regulator will find evidence of coordinated short selling or false statements designed to move the market.
It's a risky move. Investigations are public, take months, and can draw more attention to the original allegations. But if Abaxx wins, it could set a precedent that short sellers face consequences for unsubstantiated attacks. If it loses, the company's reputation takes another hit.
What this means for market trust
Trust in digital-asset exchanges is already fragile. A regulatory probe — even one that Abaxx invited — adds uncertainty. Investors may wonder: if the allegations were baseless, why did the stock fall so fast? And if they were real, why didn't the company address them earlier?
The timing isn't great. The exchange has been trying to build credibility with institutional players who demand transparent markets. A short-seller attack followed by a probe doesn't exactly scream stability. But it could also signal that Abaxx takes governance seriously enough to invite scrutiny.
Viceroy, for its part, hasn't publicly responded to the probe request. The firm typically sticks to its pattern: publish, profit, and wait for the next target.
The unresolved question
Who gets to decide what counts as market manipulation in a short-seller report? The answer depends on which regulator takes the case — and whether they have jurisdiction over a research firm that may operate across borders. Abaxx's move is a test. If regulators decline to investigate, it sends a signal that short sellers have a free hand. If they take it up, the crypto industry could see a shift in how short-selling tactics are policed in 2026.
