Mill City Seeks $500M Raise to Expand SUI Treasury as Shares Drop 11%

Mill City Ventures III, a Nasdaq-listed firm, is seeking to raise up to $500 million through a new equity agreement to expand its SUI token treasury, following an initial $450 million investment secured via the sale of 83 million shares to institutional investors such as Pantera Capital, Electric Capital, ParaFi Capital, and FalconX [1]. The firm has already used part of the initial funding to acquire 76.2 million SUI tokens valued at $276 million, with the remaining capital supporting its short-term lending operations [1].

Despite the significant investment, the firm's stock dropped over 11% following the announcement, with after-hours trading pushing the decline further to 4.28%, according to Google Finance [1]. Stephen Mackintosh, Mill City’s Chief Investment Officer, described the move as a strategic step toward offering institutional-grade exposure to the SUI ecosystem through public markets, positioning the firm as the first institutional-grade SUI treasury with official backing from the Sui Foundation [1].

The announcement aligns with a growing trend among public companies to diversify their crypto treasuries beyond Bitcoin and Ethereum, with recent additions including BNB, Solana, and XRP. Mill City is specifically leveraging the layer-1 blockchain Sui’s focus on low-latency, scalable infrastructure for AI and gaming applications to position itself in the market [1].

The $500 million equity line was arranged with Alliance Global Partners and is expected to further scale Mill City’s position in SUI. Galaxy Asset Management is overseeing the firm’s SUI holdings as the official treasury manager [1]. At the time of writing, SUI was trading at $3.45, down 2.4% on the day, mirroring the wider market downturn [1].

However, the broader trend of crypto treasuries is facing increasing skepticism. Analysts have raised concerns over the sustainability of these strategies. Ran Neuner, a crypto analyst, claimed that many crypto treasury firms are acting as exit vehicles for crypto insiders rather than actual buyers from the open market [1]. Instead of purchasing assets directly from exchanges, these companies often receive crypto contributions from existing holders in exchange for shares that trade at significant premiums on public markets [1].

Similar concerns have been echoed by industry figures, including Glassnode lead analyst James Check and VanEck’s Matthew Sigel, who questioned the longevity of corporate Bitcoin treasury strategies as the market matures and easy gains become less accessible for new entrants [1].

Mill City’s stock has seen a bullish trajectory, rising 165% since the SUI initiative was first unveiled on July 24, despite the recent downturn. The firm’s expansion into SUI reflects a broader movement in the market to explore alternative blockchain ecosystems and diversify digital asset portfolios [1].

Source: [1] https://cryptonews.com/news/nasdaq-listed-mill-city-eyes-500m-raise-for-sui-strategy-shares-sink/