When Market Momentum and Compliance Collide
Unusual Trading Ahead of Crypto-Treasury Deals Draws Regulatory Scrutiny
The announcement of Project Crypto by the Securities and Exchange Commission (SEC) Chairman Paul Atkins in July signaled a new era of regulatory clarity for digital assets. Yet the latest headlines show how quickly policy vision meets enforcement reality. Reports in The Wall Street Journal and The Block confirm that the SEC and FINRA have reached out to hundreds of companies whose shares rose sharply in the days before announcing plans to adopt crypto-treasury strategies.
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From Vision to Oversight
Atkins’ commitment to modernizing rules was meant to create predictability for firms exploring digital assets. Predictability, however, does not mean leniency. Regulators have raised concerns about whether material information may have leaked in advance of official announcements. In their outreach, the SEC has reminded companies of their obligations under Regulation Fair Disclosure, which prohibits selective disclosure of information that could influence trading.
What is Regulation Fair Disclosure?
Regulation Fair Disclosure, often called Reg FD, is an SEC rule that requires public companies to share material information with all investors at the same time. It prohibits selectively disclosing significant, nonpublic information to certain groups such as analysts, institutional investors, or market participants who might use it to trade ahead of the public. The goal is to promote fairness, transparency, and equal access to information in the markets.
The Corporate Playbook Under Pressure
The corporate pivot to crypto treasury has accelerated in 2025, with hundreds of firms announcing ambitious digital asset strategies. While this model offers new opportunities, it also introduces governance challenges that compliance teams cannot ignore.
Key developments include:
- Scale of adoption: More than 200 companies have announced plans to raise over 100 billion dollars for digital asset purchases.
- Deal structure: Many firms test investor appetite privately before going public, often under strict confidentiality agreements.
- Information risks: Recent trading activity suggests these safeguards have not always held, with leaks potentially compromising market integrity.
- Market impact: Abnormal trading volumes and sharp price movements ahead of announcements create both reputational concerns and regulatory scrutiny.
What This Means for Regulatory Compliance
These developments highlight the importance of strong governance when companies consider crypto strategies. Firms must ensure that material, nonpublic information (MNPI) is safeguarded, that employees are aware of their obligations under Reg FD, and that potential risks such as shadow trading are actively monitored. Volatility ahead of announcements does not just draw regulatory attention, it can also complicate capital raising by making pricing unpredictable.
The Broader Context
Project Crypto promised clearer rules and a supportive environment for innovation. The recent inquiries suggest that while the SEC is modernizing its approach, it will not hesitate to act when market integrity appears threatened. For compliance teams, the lesson is clear: the rise of corporate crypto strategies brings opportunity, but it also requires renewed vigilance in the handling of sensitive information.
Conclusion
The intersection of crypto adoption and regulatory oversight is still being defined. Companies pursuing digital asset strategies must balance innovation with transparency and accountability. Recent inquiries from the SEC and FINRA serve as a reminder that governance around material information, trading activity, and disclosure practices remains critical.
At StarCompliance (Star) we help firms meet these challenges with technology that supports rigorous oversight. Our solutions for MNPI Management and Crypto Dealing provide the visibility and control needed to safeguard sensitive information, monitor employee activity, and ensure policy adherence in fast-moving markets.
As Project Crypto begins to take shape, strong compliance frameworks will determine which firms can innovate with confidence and credibility. To learn more about Star’s future-ready compliance solutions and to schedule a demo, click [HERE].
Crypto Regulations Decoded
