The shares of SharpLink Gaming (SBET), the first Ethereum treasury company, have plunged by more than 70% in overnight trading.

This came after the company filed an S-3 registration statement with the SEC to let it sell securities in the future.

The above-mentioned statement covers nearly 59 million shares of common stock that may be sold to existing investors. The shares come from prefunded warrants, strategic advisor warrants, placement agent warrants and other shares from a private placement. 

In a social media post, Consensys CEO Joseph Lubin clarified that the recent regulatory filing is actually being misrepresented since it does not signal immediate share dilution.

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This does not mean that the company is about to sell a lot of shares. It is meant to allow existing investors to resell their shares if they are willing to.

Lubin has stressed that this is a regulator filing following private investment in public equity (PIPE). Hence, it should not be treated as an indication of actual sales that are about to take place. 

Furthermore, neither Lubin nor the company has sold any shares, according to the most recent statement. 

However, the market has not been swayed by Lubin, with SBET shares still being down by nearly 70% at press time.

The market still does not seem to be on board with the possible issuance of 58.7 million shares (which will take place if all warrants end up being exercised).

As reported by U.Today, ShaprLink raised $425 million via PIPE to make Ether the official treasury asset. Lubin joined as the company’s chairman.