As Corporate Crypto Treasuries Boom, So Does Suspicious Trading, Triggering SEC Probe

The booming trend of companies adding cryptocurrency to their balance sheets has attracted a new type of attention: a regulatory investigation.

The SEC and FINRA are probing suspicious stock trades that allegedly front-ran public announcements of crypto purchases by “digital asset treasury companies.”

According to the Wall Street Journal, the investigation was triggered by identifiable patterns of potentially illicit trading, including abnormal volume and price run-ups. This puts a spotlight on the internal controls at companies embracing the crypto treasury strategy.

As the trend modeled after MicroStrategy’s massive Bitcoin buys grows, regulators are signaling that standard market rules against selective disclosure still firmly apply.