Regulators Eye Stock Jumps Before Corporate Crypto Buys

Regulators, including the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), are examining unusual trading activity involving companies that announced digital asset treasury strategies. This scrutiny follows a review of over 200 firms, triggered by sharp price movements in their stocks ahead of such disclosures. Some companies were flagged for potential leaks or trading on material non-public information. Analysts warn that poorly timed treasury strategies could undermine corporate stability and may mislead investors into thinking these moves are gimmicky. The SEC's Regulation Fair Disclosure (Reg FD) restricts selective sharing of material information, imposing penalties for violations. Investigations typically begin with noted trading anomalies, and authorities gather communications that may link suspicious trades to specific sources. This scrutiny reflects ongoing concerns about transparency and regulatory compliance in the evolving digital asset landscape, highlighting the complexities firms face in managing crypto assets as part of corporate strategy.

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