Major U.S. Firm Allocates 98% of $450M to SUI Amid Insider Trading Allegations

A major U.S.-based financial firm, Mill City Ventures III, has announced a strategic shift toward cryptocurrency, allocating $450 million in a private funding round to acquire Sui (SUI), an altcoin associated with blockchain-based applications such as gaming and artificial intelligence infrastructure. The company revealed that 98% of the funds will be directed to SUI purchases via open-market transactions and agreements with the Sui Foundation, while 2% will support its short-term lending operations [1]. The funding is led by Karatage Opportunities, a digital asset-focused hedge fund, and the Sui Foundation, with Karatage founders Marius Barnett and Stephen Mackintosh joining Mill City’s board as chairman and chief investment officer, respectively. The transaction is expected to finalize by July 2024 [1].

The move has sparked controversy following allegations of insider trading. Cryptocurrency analyst Eugene Ng Ah Sio claimed on social media that an executive may have executed trades in SUI before the announcement, potentially exploiting non-public information [1]. Ng Ah Sio noted that the SUI price surge preceded the treasury disclosure, prompting him to close his long position. While Mill City has denied wrongdoing, it has not yet provided a detailed timeline of pre-announcement transactions. Legal experts warn that if substantiated, such conduct could trigger regulatory penalties and reputational risks [2].

This development aligns with broader trends of institutional adoption of altcoins. For example, Windtree Therapeutics recently allocated $520 million in BNB to its treasury, and another firm has shown interest in Hyperliquid’s HYPE token, reflecting growing corporate diversification into digital assets [3]. However, the SUI case highlights risks tied to market volatility and regulatory ambiguity. Analysts caution that altcoins—unlike Bitcoin—often lack liquidity and stability, making large-scale corporate holdings speculative [3].

Regulatory scrutiny is intensifying. The U.S. Securities and Exchange Commission (SEC) has emphasized pre-announcement disclosure requirements to prevent conflicts of interest. Critics argue that the lack of clear governance frameworks for altcoin investments increases exposure to manipulation and legal challenges [3]. Meanwhile, market reactions remain mixed. While corporate adoption typically boosts token prices in the short term, analysts like Bernstein warn that rapid price movements in digital assets—observed in Ethereum, for example—can amplify volatility and investor caution [4].

The controversy underscores the dual-edged nature of altcoin treasury strategies. While firms aim to hedge against inflation or position for blockchain-driven growth, they must navigate heightened regulatory expectations and market skepticism. Mill City’s decision reflects a broader shift in corporate finance but also illustrates the challenges of balancing innovation with compliance. As the SEC and other regulators monitor such activities, the long-term viability of altcoin treasuries will likely depend on transparency, legal clarity, and sustained institutional confidence.

Sources:

[1] https://coinmarketcap.com/community/articles/6887db653c1f324d515330c4/

[2] https://en.bitcoinsistemi.com/major-us-company-announces-it-will-add-a-large-amount-of-this-altcoin-to-its-treasury-but-there-is-controversy/

[3] https://cryptoadventure.com/whats-next-for-hyperliquids-hype-token-what-wall-street-and-analysts-are-saying

[4] https://nz.finance.yahoo.com/quote/BTC-USD/news/