US regulators are investigating unusual stock trading that occurred just before companies announced plans to buy cryptocurrencies for their corporate treasuries.
According to The Wall Street Journal on Thursday, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (Finra) have contacted several of the more than 200 publicly traded digital asset treasury companies (DAT).
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The investigation is focusing on red flags such as abnormally high trading volume and sharp price increases in the days leading up to cryptocurrency announcements.
The SEC is specifically examining possible violations of the Regulation Fair Disclosure (Reg FD), which prohibits selectively sharing non-public information that could influence the market.
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This scrutiny highlights the regulatory challenges that arise as the trend of corporate cryptocurrency treasuries, popularized by companies such as MicroStrategy, continues to gain momentum.