U.S. regulators are examining potential insider trading in the shares of firms with digital assets in their treasuries (DAT), the Wall Street Journal reported, citing people familiar with the matter.
According to the paper, the SEC and the FINRA have already sent inquiries to a number of companies. The probe covers more than 200 issuers that disclosed cryptocurrencies in their reserves.
Unusual market activity drew the watchdogs’ attention: ahead of official announcements about digital-asset purchases, stocks saw sharp price spikes and abnormally high trading volumes.
The Commission warned firms about possible violations of the Fair Disclosure Rule (Regulation FD). It prohibits providing confidential information to a limited group, giving them an advantage in the market.
Critics of the DAT strategy have already pointed out possible insider dealing. Experts have repeatedly highlighted the risks of digital treasuries. In July, on-chain analyst James Check predicted a collapse among Strategy’s copycats.
CryptoQuant said that firms with cryptocurrency reserves could face a sudden drop in their quotations.
The crypto-treasury boom
A total of 194 public companies have joined the bitcoin-accumulation strategy. They hold more than 1 million BTC worth over $110bn, equal to 4.6% of the total supply of digital gold.
The largest holder of the first cryptocurrency is Strategy, which holds 639,835 BTC worth $70bn. Marathon Digital (52,477 BTC, $5.7bn) and Twenty One Capital (43,514 BTC, $4.7bn) round out the top three.
Ethereum-focused firms have bought a combined 5.2 million ETH worth $20.6bn.
Market conditions
Over the past 24 hours, digital-asset market capitalisation fell 2.4% to $3.8trn. All top-10 coins declined, losing up to 5%.
Bitcoin dropped to $108,787. At the time of writing, the cryptocurrency trades around $109,000.
Ethereum fell below $4,000 for the first time since early August. The 24-hour low was $3,833.
According to CoinGlass, 24-hour liquidations exceeded $970m. Traders who bet on gains in the two largest cryptocurrencies suffered the biggest losses.
The Fear and Greed Index fell from 44 to 28 — near the boundary with the “extreme fear” zone.
Earlier, QCP warned of the risk of bitcoin falling to $107,000 and Ethereum to $3,300.