Unusual trading patterns dog crypto treasury companies
U.S. regulators are investigating price and volume spikes before companies announced digital-asset treasury deals.
A new Bloomberg report raises red flags about crypto treasury companies, highlighting suspicious stock spikes, insider trading fears, and leaks that are drawing scrutiny from the U.S. Securities and Exchange Commission (SEC). These firms, often called digital-asset treasuries (DATs), buy cryptocurrencies such as Bitcoin and BNB for their corporate balance sheets.
Bloomberg notes that on September 26, shares of Applied DNA Sciences rose about 52% before the company disclosed a private deal of up to $58 million tied to a BNB strategy. The stock jumped again after the announcement and later fell. Applied DNA’s chief investment officer, Patrick Horsman, said the company held many investor meetings before the deal and maintained controls. He emphasized that strict measures were in place to safeguard confidential information, and that neither he nor his team knew how the leak occurred.
Analysts cited other cases where stocks climbed ahead of similar disclosures, including KindlyMD, Brera Holdings, SharpLink Gaming, and SUI Group Holdings. Regulators are asking whether material information may have circulated before announcements and whether any trading broke market rules.
Some market participants said early leaks can disadvantage long-term investors who enter private placements with lockups, while short-term traders capture gains. Others point to allegations that certain insiders trade tokens or shares before news becomes public. Delays in registering new shares have also added to uncertainty, said Henry Elder of Satsuma Technology.
When you start playing games with your investors’ lockup, then you lose market confidence and the entire thing falls apart,Elder believes.
Bloomberg notes that arguably the hottest trade in crypto this year, DATs, has accumulated around $140 billion in Bitcoin alone. That surge helped push the original digital asset to record highs before a selloff sparked by US-China trade tensions, which saw around $19 billion in market liquidations on October 11. DAT Bitcoin purchases have also slowed considerably since early summer, as stock prices declined. Analysts say DATs must shift from speculative bets to real investments.
Author
Web3 writer and crypto HODLer with a keen interest in market trends and recent technologies.
Recommended