Major stock jumps around crypto moves raise suspicions of insider activity

MEI Pharma’s stock jumped in mid-July. It wasn’t because of a new cancer drug. The company said it would buy $100 million of Litecoin for its cash reserves. After that, the share price went from $3 to almost $7.

What was odd is that the stock had already risen in the days before the news, even though there were no SEC filings, no press releases, and little social media talk.

Other small-cap names also posted sharp gains shortly before unveiling plans to hold crypto in corporate treasuries, a pattern that raises the possibility that some market participants traded on information that wasn’t public.

Today’s “crypto treasury” wave traces back to billionaire Michael Saylor.

In 2020, the founder and chairman of Strategy, formerly called MicroStrategy, announced the software company would hold Bitcoin as a reserve asset. Investors began to treat the shares as a stand-in for Bitcoin’s price.

Imitators soon emerged. A budget hotel operator in Japan started buying Bitcoin in 2024, and others followed.

The pace accelerated this year. Since January, 184 listed companies have disclosed crypto purchases totaling almost $132 billion, according to Architect Partners, a crypto M&A advisory and financing firm.

“We’ve kind of hit this point of saturation,” said Louis Camhi in a Fortune report, founder of RLH Capital, which has worked on recent transactions. He added that investors are now watching to see whether those positions generate returns.

Not all of the gains appear to be going to retail traders

In several cases, stocks jumped just ahead of announcements.

SharpLink, a marketing firm serving sportsbooks and casinos, traded under $3 through April and early May.

On May 27, it said it would add $425 million in Ethereum, sending the shares to nearly $36. Yet in the three trading days before that news, the stock doubled from $3 to $6 despite no filings or press releases.

U.S. rules governing “material non-public information” require tight controls. Outsiders granted access to sensitive details are typically “wall-crossed” and logged so regulators can trace who knew what.

While crypto treasury deals can take months to assemble, the final marketing push often happens just before the announcement through brief investor roadshows. SharpLink met with investors across three days ahead of its shift; those same days coincided with the stock’s move. Mill City’s two-day outreach lined up with its jump as well.

Insider-trading prohibitions cover more than corporate officers; they also extend to anyone who trades after receiving material tips, said Elisha Kobre, a partner at Sheppard Mullin and a former federal prosecutor in the Southern District of New York.

Who is benefiting remains unclear

A handful of executives filed notices of grants or purchases before pivots, but most did not sell, SEC records show.

Companies are trying to tighten processes to stop leaks. “It’s a bad look for everyone here,” said Camhi, urging quick fixes. Mackintosh said his team shortened investor outreach on a separate transaction to two trading days.

Some firms went further. In late July, CEA Industries said it raised $500 million to hold BNB. To reduce pre-announcement trading, dealmakers withheld the company’s ticker during outreach and disclosed it to investors only on Friday night after markets closed on July 25, said CEO David Namdar. The company, now called BNB Network Company, aimed “to minimize the risk of leaks or volatility” before releasing news the following Monday.

A week later, Verb Technology revealed a $558 million raise to hold TON and used the same approach, keeping its ticker back until after the Friday close, according to an investor who asked not to be named. Even with those steps, the stock rose nearly 60% in the four hours before the Monday announcement went live.

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