US Regulators Investigate Stock Price Swings in Cryptocurrency Sector
US regulators are looking into unusual fluctuations in stock prices that occurred before companies publicly announced plans to fund cryptocurrency purchases, as reported by The Wall Street Journal.
The Securities and Exchange Commission, alongside other financial regulators, has reached out to over 200 companies that disclosed their cryptocurrency strategies this year, according to sources.
Authorities have cautioned these businesses about potential violations related to selectively sharing information that isn’t available to the public.
This scrutiny arises during a period where many companies are embracing cryptocurrency strategies, inspired in part by MicroStrategy’s earlier success. A number of companies, even those outside the crypto arena, have declared intentions to raise capital specifically for buying Bitcoin.
This trend picked up pace in early 2025 following an executive order by the Trump administration that aimed to create a national strategic Bitcoin reserve. Since that time, over 60 companies from various sectors, including software and biotechnology, have expressed plans to invest part of their resources into cryptocurrencies.
Overall, these companies are looking to generate over $200 billion through stock offerings, convertible debts, and private placements, hoping to hedge against inflation, attract younger investors, and leverage the advantages experienced by early adopters.
However, there have been notably dramatic increases in stock prices just days before these companies made their announcements—sometimes prices doubled or tripled. This has led to concerns about possible insider trading, prompting regulators to step in.
One of the most high-profile cases has been the Trump Media and Technology Group, which experienced significant stock volatility while planning to raise $2.5 billion from Bitcoin’s Treasury Department, preceding a disclosure on May 27. This announcement positioned the company among the largest corporate Bitcoin holders alongside others like Strategy and Marathon Digital Holdings, although regulators quickly identified suspicious trading activities.
GameStop followed a similar trajectory, with the retailer announcing a $500 million Bitcoin purchase on May 28. Interestingly, its stock had already surged by 40% in the three trading sessions leading up to the news. The SEC is now reviewing clustered purchase orders connected to company vendors, and FINRA is examining communications among brokers.
Another example is Mei Pharma, a biotechnology firm that attracted attention in July by revealing plans to invest a significant portion of its cash reserves into Litecoin. The firm’s stock nearly doubled in the days leading up to the filing, with an unusual uptick in call option activity. Investigators are now looking into whether the briefings for investors breached disclosure regulations.
