SEC, FINRA Probe Suspicious Trading Before Crypto-Treasury Announcements

The SEC and FINRA have launched an investigation into suspicious trading activity before publicly traded companies announced plans to acquire ￰0￱ believe some investors may have profited from having prior, non-public knowledge of these crypto-treasury announcements, potentially violating fair disclosure ￰1￱ Breach of Fair Disclosure Rules The investigation focuses on publicly traded digital asset treasury (DAT) firms, which are companies that declare plans to acquire capital and buy ￰2￱ than 200 DATs went public this year, and some of them are currently in contact with ￰3￱ identified “suspicious trading patterns”, including high trading volume spikes and sudden price rises in the days or hours before firms announced their crypto-buying ￰4￱ actions suggest that at least some investors might have been profiting by trading on inside ￰5￱ officials have already cautioned several companies over potential Regulation Fair Disclosure (Reg FD) breaches, a provision requiring material, nonpublic information to be broadly disclosed rather than ￰6￱ financial watchdog is concerned that some were tipped about impending crypto buys and profited by selling the companies’ stock ahead of the news ￰7￱ agree that these breaches put market value at risk and expose businesses to legal repercussions and reputational ￰8￱ in the larger non-crypto financial market, the agency has never had such reservations about Reg FD violations.

Therefore, this level of scrutiny raises the likelihood that crypto-treasury firms will face tighter restrictions in the near ￰9￱ Crypto Boom Under the Microscope The investigation occurs against a backdrop of more businesses moving to adopt ￰10￱ movers have already helped digital asset treasuries attract over $20 billion in venture capital this year, with more than $100 billion committed to crypto buying ￰11￱ firms now hold over 1 million BTC, valued at $113 billion, and 5.26 million ETH, worth $20.6 ￰12￱ DAT raises peaked at $6.2 billion in July, representing the highest single-month total ever ￰13￱ now face the challenge of ensuring this growing trend does not open new avenues for insider trading and selective ￰14￱ argue that investment by corporate treasuries signals confidence in the long-term value of cryptocurrencies.

However, there remain concerns over the pace at which companies disclose market information and raise funds, which could encourage selective disclosure, leaks, and manipulative ￰15￱ SEC and FINRA have said that the crypto treasury boom must operate within existing securities laws and are moving proactively against suspicious ￰16￱ misconduct is uncovered, enforcement action could follow, setting a precedent for future regulation of corporate digital asset adoption.