Financial regulators in the US have begun scrutinizing the stock movements of some publicly traded companies before they announce crypto asset purchases. According to the Wall Street Journal, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (Finra) are investigating unusual trading patterns at companies pursuing a digital asset treasury strategy.
Authorities have identified striking trading volumes and price movements, particularly at publicly traded companies known as "Digital Asset Treasury Companies" (DATs), which have added cryptocurrencies to their balance sheets. The fact that these movements occurred shortly before the companies' official public announcements raises suspicions that they may be based on insider trading.
The SEC has reportedly issued warnings to some companies about potential violations of Reg FD (Fair Disclosure). This regulation prohibits companies from sharing material, not yet publicly disclosed information only with certain investors. The aim is to ensure equal access to information for market participants.
More than 200 companies contacted
Finra and the SEC reportedly contacted approximately 200 DAT companies. The investigations focused on unusual trading volumes and sudden increases in share prices immediately preceding crypto acquisition announcements. Regulators believe such transactions could undermine market confidence and lead to manipulation.
This development comes as companies are shifting to crypto treasury strategies. This trend, spearheaded by MicroStrategy since 2020, has been increasingly adopted by more companies in recent months. By holding assets like Bitcoin and Ethereum on their balance sheets, companies are diversifying their investments and aiming to capitalize on their long-term value growth.
This year alone, DAT companies have attracted more than $20 billion in venture capital investment, demonstrating the institutional interest in crypto. Regulators, however, emphasize that this growth must occur within the framework of transparency and market fairness.
MicroStrategy remains the largest institutional player in this space. The company, led by Michael Saylor, recently purchased an additional 850 Bitcoins, bringing its total reserves to 639,835 BTC. The total value of these purchases reached $99.7 million.
The investigation launched by the SEC and Finra is seen as a sign that institutional investors' involvement in crypto assets will now be subject to stricter scrutiny, not only from a financial perspective but also from a regulatory perspective. As US companies continue to add crypto to their balance sheets, allegations of insider trading or unfair dealings are expected to increase.
Therefore, publicly traded companies investing in crypto assets are expected to be more vigilant about their transparency obligations in the coming period. Otherwise, they could face both serious sanctions and the loss of investor confidence.
