SEC, FINRA Probe Insider Trading in Crypto-Treasury Firms

The investigation centers on what regulators describe as ‘suspicious trading patterns’ in the stocks of companies planning cryptocurrency acquisitions. According to the SEC and FINRA, these patterns included dramatic spikes in trading volume and sudden price increases occurring in the days or even hours before firms publicly announced their crypto-buying plans. The timing and nature of these trades strongly suggest that certain investors had advance knowledge of material, nonpublic information about upcoming crypto-treasury announcements.

Regulators have already cautioned several companies about potential violations of Regulation Fair Disclosure (Reg FD), the securities rule requiring that material information be disclosed broadly to all investors simultaneously rather than selectively. The concern is that insiders or connected parties may have been tipped about impending cryptocurrency purchases, allowing them to profit by trading the companies’ stock ahead of the official news releases. This investigation marks an unprecedented level of regulatory focus on Reg FD violations within the crypto space, even compared to traditional financial markets where the SEC has never expressed such significant reservations about fair disclosure breaches.

The investigation specifically targets publicly traded digital asset treasury (DAT) firms—companies that declare plans to raise capital specifically for cryptocurrency acquisitions. This year alone has seen more than 200 DAT firms go public, with many now in direct communication with regulators regarding the trading patterns surrounding their announcements. The scale of this corporate crypto movement is substantial: public companies now hold over 1 million Bitcoin (BTC) valued at approximately $113 billion and 5.26 million Ethereum (ETH) worth about $20.6 billion.

The corporate crypto boom has attracted massive investment, with digital asset treasuries drawing over $20 billion in venture capital this year and more than $100 billion committed to crypto buying plans. Monthly fundraising by DAT firms reached a record $6.2 billion in July, representing the highest single-month total ever recorded. While advocates argue that corporate treasury investment signals confidence in cryptocurrencies’ long-term value, regulators now face the challenge of ensuring this rapid growth doesn’t create new opportunities for insider trading and selective disclosure practices that undermine market integrity.

Financial experts agree that Regulation FD violations pose significant risks to market value and expose businesses to serious legal and reputational consequences. If misconduct is uncovered, enforcement actions could follow, potentially setting important precedents for how corporate digital asset adoption is regulated moving forward. The SEC and FINRA have made clear that the crypto treasury boom must operate within existing securities laws, and they are taking proactive measures against suspicious trading patterns.

The investigation’s outcome could lead to tighter restrictions on how companies disclose crypto-related plans and raise funds for digital asset acquisitions. Regulators are particularly concerned about the pace at which companies disclose market information and the potential for selective disclosure, leaks, and manipulative trading. This level of regulatory scrutiny suggests that crypto-treasury firms may face more stringent requirements in the near future, potentially affecting how corporations approach cryptocurrency investments and the transparency requirements surrounding such announcements.