- Over 200 enterprises that publicized “crypto treasury” strategies in the preceding year have received inquiries from the SEC and FINRA regarding potential irregularities in trading activity prior to such announcements.
- Regulation FD mandates equivalent material disclosures to the general public as those made to analysts or significant investors. AT&T recently faced a substantial penalty of $6.5 million for infringements of Regulation FD.
- While many “crypto treasury” businesses initially adopted the Strategy (formerly Microstrategy) (NASDAQ: MSTR) blueprint by accumulating digital assets, a number have since initiated stock repurchase initiatives to counteract declining share values.
According to a report by the Wall Street Journal, American regulatory agencies are scrutinizing variations in company stock values that occurred preceding declarations of intentions to establish
digital asset reserves.
The Wall Street Journal specifies that the
Securities and Exchange Commission (SEC) and the
Financial Industry Regulatory Authority (FINRA) have contacted more than 200 firms who announced crypto treasury adoption strategies this year. FINRA, an SEC affiliate, is devoted to upholding adherence to just market practices and regulatory standards.
Citing sources knowledgeable about the investigations, the Wall Street Journal stated regulators expressed “concern” to businesses noticing significantly elevated trading volumes and steep price increases just ahead of publishing their digital asset strategies.
The SEC is particularly cautioning companies regarding potential breaches of Regulation Fair Disclosure (Reg FD). Reg FD mandates that if public businesses reveal substantial, non-public information to certain groups (such as analysts or institutional investors), they must concurrently disclose the same to the general public. It essentially protects investors from restricted disclosure, intended to bolster transparency and accountability in public markets.
Violations of Reg FD may lead to the SEC imposing typical disclosure penalties. These punishments are civil rather than criminal in nature, but fines can amount to $500,000 per infringement. Individuals facilitating company infractions may also be penalized according to SEC regulations.
For example, in 2022, the SEC reached a record settlement with the telecommunications corporation AT&T (NASDAQ: T) for Reg FD violations. AT&T had directed its investor relations division to collaborate with industry analysts to adjust earnings predictions for the AT&T stock downwards following the discovery of a more substantial than anticipated decline in smartphone sales during 2016. AT&T was mandated to pay $6.25 million in penalties; three investor relations executives were also charged with aiding and abetting the violations, resulting in individual fines of $25,000 each.
Since the increasing
integration of ‘crypto’ among governments and general public, corporations have been emulating the
Strategy (formerly Microstrategy) model, pledging to add digital assets to their financial statements. Since 2020, Strategy has amassed over $60 billion in BTC, and its ticker was regarded as a practical surrogate until the formal BTC ETFs were authorized in the U.S. Over the past five years, the company has risen by roughly 2,000%.
The Wall Street Journal Report incorporates statistics from the crypto advisory firm Architect Partners, asserting that 212 new businesses have publicized their adoption of digital asset strategies in 2025 alone, collectively pledging around $102 billion to these projects.
These firms ostensibly justify this action by extolling the virtues of the technology. However, one wonders whether these companies are in pursuit of similar stock price boosts that were enjoyed by Strategy.
For some, the underlying motivations are more transparent than others. For instance, a
press release from Mercurify Fintech drew scrutiny by indicating intentions to procure $800 million to fund a
Bitcoin reserve; an unlikely objective given the company’s annual revenue is
no greater than $1 million.
However, in a sign that these approaches are unsuccessful for some, self-declared treasury holders have started share repurchase programs to lift stock values that frequently put their companies’ value at less than their digital asset treasury holdings.
For example, in August, 180 Life Sciences, a biotech firm backed by Peter Thiel,
announced plans to accumulate ETH, renaming itself ETHZilla. The stock value immediately surged from below $5 to over $16, only to lose those profits by early September. Soon after, the firm
announced a $250 million buyback strategy.
SharpLink Gaming presents a similar narrative: the company has accumulated $3.7 billion in ETH, yet it is valued at $3.13 billion at the time of writing. The company publicized a $1.5 billion buyback initiative in August; its share values have diminished ever since.
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