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Crypto Treasury Craze Sparks Investigations Into Sharp Stock Rallies
According to a Wall Street Journal report, citing sources familiar with the matter, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have reached out to certain crypto treasury companies regarding potential Regulation Fair Disclosure violations, also known as Reg FD.
This rule specifically requires that material, non-public information be shared broadly, instead of with a few handpicked analysts, investors, and other market participants who could potentially benefit from trading just before official announcements. Violation of Reg FD can expose companies to civil penalties, enforcement actions, and reputational risk.
The investigation was drawn from a review of over 200 firms that disclosed crypto treasury strategies this year, though only a select few were flagged.
Described as preliminary, the scrutiny focuses on suspicious trading patterns, including abnormally high trading volumes and dramatic stock price jumps in the days leading up to the disclosure of some companies’ strategies for digital assets, according to the WSJ report.
 
FINRA has already sent letters to the firms, a move former SEC lawyer David Chase described as the ‘first step’ in the insider trading investigation.
“When those [FINRA] letters 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,” David added.
The regulatory inquiries come amid a surge in corporate interest in crypto treasury strategies, following the playbook set forth by Michael Saylor’s Bitcoin giant, Strategy. Such a crypto treasury trend has attracted significant momentum in recent months, with various companies raising debt or equity to acquire digital assets as balance-sheet reserves, not just Bitcoin, but also Ethereum, Solana, and others.
Strategy holds the crown as the world’s largest public corporate holder of Bitcoin. Earlier this week, Strategy announced the acquisition of an additional 850 BTC for nearly $100 million, lifting its total BTC stockpile to a whopping 639,835.