Crypto Treasury Boom Triggers Insider Trading Concerns – Fortune Report

Key Takeaways:

• Several small-cap firms saw unexplained share price increases ahead of crypto treasury announcements.

• Finance experts warn that the trend resembles known insider trading patterns.

• Regulatory gray areas make enforcement difficult compared to traditional financial disclosures.

Unusual stock movements ahead of cryptocurrency announcements at several small-cap companies are prompting scrutiny over potential insider trading, according to a Fortune report published on August 28.

The story cites multiple instances where company shares surged in the days before disclosing large crypto purchases. MEI Pharma, for example, saw its stock nearly double prior to revealing a $100 million Litecoin acquisition. No regulatory filings or public statements were issued ahead of the spike.

A similar pattern was observed at firms including SharpLink, Mill City Ventures, and Kindly MD.

“It does look suspicious to me,” said Xu Jiang, a finance professor at Duke University. “This usually happens for a lot of insider trading scenarios that I anecdotally know about.”

SharpLink’s shares more than doubled three days before the company announced a $425 million Ethereum allocation. The company said it has “established policies and procedures” to prevent insider trading, but did not provide specifics.

Mill City Ventures, which has since rebranded as SUI Group Holdings, saw its shares triple ahead of news that it raised $450 million to acquire Sui.

“There was definitely activity in the stock prior to the announcement,” said Stephen Mackintosh, an executive involved in the deal.

Executives and investors who receive material non-public information before a crypto deal are subject to insider trading laws, including those briefed during roadshows, said Elisha Kobre, a partner at Sheppard Mullin.

Some companies are now withholding ticker symbols from investors until markets close, in an attempt to limit price distortion. CEA Industries and Verb Technology have both adopted this approach in recent weeks.

“It’s really to everyone’s advantage to squash this issue,” said Louis Camhi, founder of RLH Capital.

While insider trading rules are well established in traditional finance, the rise of crypto treasury strategies introduces gray areas in enforcement. Unlike mergers or earnings reports, crypto purchases often involve decentralized assets with volatile pricing and informal communication channels, making it harder for regulators to monitor information flows or trace leaks with precision.