Over 200 firms are under the SEC's scanner amid their crypto-focused treasury deals which have led to a significant spike in their stocks. | Credit: Anthony Kwan/Getty Images
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Key Takeaways
SEC and FINRA are investigating potential insider trading among crypto treasury firms.
The U.S. regulators identified 200 firms that have announced crypto treasury plans.
Among these, a selected few saw an unusual price spike in stocks even before the announcement.
Nearly 200 firms are currently under the scanner of the Securities and Exchange Commission (SEC) amid their crypto-focused treasury deals, which have led to a significant spike in their stocks.
Several public companies have rushed to add Bitcoin, Ethereum, or Solana to their balance sheets, following in MicroStrategy’s footsteps.
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These strategies involve raising capital to acquire cryptocurrencies, such as Bitcoin or Ethereum, as part of corporate balance sheets.
The investigations concentrate on questionable trading trends in the days or weeks preceding these disclosures, such as sudden spikes in stock prices and high trading volumes.
Regulators are concerned about possible insider trading or infractions of Regulation Fair Disclosure (Reg FD), which requires that all investors be given equal access to material nonpublic information.
SEC and FINRA Findings
The SEC and FINRA’s scrutiny stems from an “unusual trading activity” pattern detected through market surveillance. Regulators reviewed disclosures from all 200+ firms and flagged a subset for deeper probes.
Stocks of many such companies rose 20-40% in the sessions before the news, with alleged clustered buy orders from insiders, vendors, or brokers. Trading volumes spiked abnormally, suggesting coordinated or informed activity.
At the same time, FINRA is examining broker-dealer emails, chats, and calls for leaks, and the SEC is tracing trades to potential tips..
Some of the companies that saw an unusual spike include:
FINRA has sent formal letters to dozens of firms, reminding them of Reg FD obligations and warning against selective disclosures. According to former SEC enforcement lawyer David Chase, these letters are often the “first step” in investigations.
Public Companies Eye $100 Billion Fundraise To Buy Crypto
This development underscores the growing complexities between traditional securities regulations and corporate cryptocurrency adoption.
Bitmine, a Bitcoin mining company, announced its ETH treasury plans in the last week of June, and its stock price jumped from $4.67 on June 27 to $46.58 on July 2, a 10X surge in a week or nearly 1000% stock price gain, which is not just volatile even for the crypto market.
Bitmine Stock price surge post-ETH adoption. Source: Google
Similarly, Sharplink, ETHZila, and many other firms that started hoarding ETH and other crypto assets saw a significant boost in stock prices.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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