XRP News Today: Small Firms Announce Massive Crypto Buys Amid Skepticism

Several small companies with minimal market value have recently announced plans to acquire large amounts of XRP and Solana during the current crypto bull run. These announcements have raised significant doubts, as many of these companies lack strong ties to the crypto industry and have limited financial backing. For instance, Singapore-based Trident Digital Tech, with a market cap of just $16 million, announced plans to raise $500 million to build a massive XRP treasury, despite its shares trading under $0.40 on Nasdaq.

Matthew Sigel, VanEck’s Head of Digital Assets, has expressed skepticism about these moves, suggesting that they are likely attempts to boost the stock prices of small companies. Sigel believes that many of these announcements are insider-driven pump-and-dump schemes, where company insiders hype up news to inflate the stock price, then sell their shares for a profit before the price crashes. He warned, “Insider pump and dump attempts—many of them. If the market cap is de minimis and there is no disclosure of new anchor investors, I assume it's a scam.”

Sigel highlighted the case of Addentax Group, a China-based clothing company with a market cap of just a few million dollars, which claimed it would buy $800 million worth of Bitcoin and TRUMP coin. He cautioned followers not to take such claims seriously. Similarly, Classover Holdings, an ed-tech firm with shares under $4 and a market cap below $100 million, announced plans to raise $500 million for a Solana treasury. China’s Webus International, also with a market cap under $100 million, revealed plans to build a $300 million XRP treasury.

DeFi Development Corp. has taken the crypto treasury trend a step further by announcing a deal to sell up to $5 billion worth of its shares to build a Solana treasury. The company claims this is its primary business focus. However, just a few months ago, its market cap was $7 million; now, it stands around $379 million. Sigel believes these small firms are trying to mimic Michael Saylor’s Bitcoin playbook—but without any real financial backing.

VanEck, a prominent investment management firm, has issued a warning to investors regarding the legitimacy of these announcements. The firm's cautionary stance is not without precedent, as similar schemes have been uncovered in the past, leading to significant financial losses for unsuspecting investors. These incidents have underscored the need for greater regulatory oversight in the crypto space.

VanEck's warning highlights the importance of transparency and accountability in the crypto market. As more companies explore the potential of digital assets, it is crucial for investors to remain vigilant and discerning. By doing so, they can protect themselves from falling victim to fraudulent schemes and ensure that their investments are made in good faith. The volatile nature of the crypto market makes it particularly concerning, as investors may be more susceptible to falling for these tactics. VanEck's warning serves as a reminder for investors to exercise caution and conduct thorough due diligence before making investment decisions based on such announcements.