The US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) are reportedly investigating suspicious trading patterns in the shares of certain companies that have announced crypto treasury strategies.
People familiar with the matter told the news media outlet that the SEC and the FINRA have examined unusual trading moves in the shares of multiple unnamed companies that announced that they would adopt a DAT strategy this year.
Reportedly, the regulators have raised concerns in letters and conversations about “unusually high trading volumes and sharp stock-price gains” that preceded the announcement that these companies would make cryptocurrencies their core corporate strategy.
According to some lawyers, these types of FINRA letters usually mark the start of serious investigations into insider trading. However, it remains unclear whether the financial regulators are pursuing enforcement actions against any of these companies or investors.
Former SEC enforcement lawyer and now SEC defense attorney David Chase told WSJ that “when those go out, it really stirs the pot. It’s typically the first step in an investigation. Whether it goes full, full length, it’s anybody’s guess.”
“If the stock price is highly volatile in the days leading up to pricing a transaction, that could actually make it very difficult to agree on a price for the transaction and put it at risk of execution,” Justin Platt, a partner at law firm Goodwin, told WSJ.
Over the past few months, the crypto treasury strategy trend, pioneered by Michael Saylor’s Strategy, has gained momentum, with 212 new companies announcing plans to raise hundreds of billions of dollars to launch DAT strategies, the WSJ noted, citing data from crypto advisory firm Architect Partners.
Recently, Helius Medical Technology revealed the launch of a $500 million SOL treasury strategy backed by Pantera Capital and Summer Capital. Similarly, Nasdaq-listed Fitell Corporation, a global provider of fitness equipment and health solutions, has unveiled the launch of the first Solana-based digital asset treasury in Australia.
