Regulators Probe Crypto Treasuries Over Pre-Announcement Trading Leaks

The U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) are investigating over 200 publicly traded companies for potential insider trading and violations of Regulation Fair Disclosure (Reg FD) tied to their crypto treasury strategies. The probes focus on unusual trading patterns, including sharp stock price surges and elevated trading volumes, observed before firms announced plans to allocate corporate capital to cryptocurrencies like Bitcoin, Ethereum, or Solana. Regulators have identified suspicious pre-announcement activity in cases involving Trump Media & Technology Group, GameStop, and SharpLink Gaming, where stock prices spiked by 20-40% in the days preceding disclosuresOver 200 Firms Face SEC, FINRA Scrutiny Tied to Crypto-Treasury …^[1].

The investigations highlight concerns over selective leaks of material nonpublic information, which could undermine market fairness. FINRA has sent formal letters to dozens of firms, emphasizing Reg FD obligations, while the SEC is tracing trades to identify potential tippingSEC and FINRA probe crypto-treasury stock spikes at 200+ firms^[2]. Over $100 billion has been raised by companies to fund these crypto treasury initiatives, a trend modeled after MicroStrategy’s strategy of leveraging equity or debt to purchase digital assets200+ Corporate Crypto Treasury Firms Under Probe from SEC, …^[3]. However, the regulatory scrutiny underscores the tension between corporate adoption of cryptocurrencies and existing securities laws.

Key findings from the probes include abnormal trading volumes and clustered buy orders from insiders, brokers, or vendors before announcements. For example, Bitmine’s stock surged from $4.67 to $46.58 in five days ahead of its Ethereum treasury plan, while MEI Pharma’s shares nearly doubled before disclosing a Litecoin purchaseUnderstanding Crypto Regulation: U.S. vs. Global Policies | 1440^[4]. These patterns have triggered warnings from former SEC enforcement lawyer David Chase, who noted that such letters often signal the start of formal investigationsSEC and FINRA Investigate Pre-Announcement Stock Surges as …^[5]. The SEC and FINRA are also reviewing broker-dealer communications for evidence of leaks, with the latter examining emails, chats, and calls for unauthorized disclosuresHow 2025’s Crypto Rules Are Transforming the Global Oversight?^[6].

The crypto treasury boom, which has seen 212 companies raise $102 billion for digital asset acquisitions, is now under a microscope for compliance risks. Companies typically secure funding through stock offerings or debt, then use proceeds to buy crypto, a strategy that relies on maintaining a market-to-net-asset-value (mNAV) premiumDigital Assets: From Crypto to Compliance^[7]. However, if mNAV dips below 1, the feedback loop collapses, forcing firms to sell crypto to stabilize stock prices—a scenario that could trigger market volatilityCrypto Regulation: How It’s Governed in the U.S. and …^[8]. Franklin Templeton Digital Assets has warned that this model’s structural fragility could lead to forced liquidations during downturns, exacerbating price declinesCrypto Treasury Boom Faces Hidden Structural Risk - The Coinomist^[9].

Regulators’ actions reflect broader efforts to align crypto practices with traditional financial oversight. The SEC’s recent shift toward “clear, predictable rules” contrasts with past enforcement-heavy approaches, yet the current probes suggest ongoing vigilanceRegulators Intensify Scrutiny on Crypto Treasury Deals: Over 200 …^[10]. The outcome of these investigations could reshape corporate disclosure protocols and penalties for noncompliance. For now, firms face heightened scrutiny over internal controls, with compliance costs and legal risks likely to rise. The market remains watchful as the SEC and FINRA balance innovation with investor protection in the evolving crypto landscape.