tl;dr
Asia's major stock exchanges are banning digital asset treasury (DAT) models, sparking fears of a crypto market crash. Japan remains an outlier, but even its leniency faces challenges as index providers push back.
**Global Stock Exchanges Clamp Down on Digital Asset Treasury Models as Regulatory Scrutiny Intensifies**
Stock exchanges in India, Hong Kong, and Australia have taken steps to restrict companies from adopting digital asset treasury (DAT) models, signaling growing regulatory skepticism toward crypto-focused entities. Meanwhile, Japan remains an outlier, allowing DATs under strict disclosure rules, even as industry experts warn of an impending market correction.
**Regulatory Pushback in Key Markets**
Hong Kong Exchanges & Clearing Ltd. (HKEX) has reportedly rejected at least five companies seeking to become DATs, citing rules against “cash companies” that hold primarily liquid assets. A Bloomberg report cited anonymous sources, noting that regulators view such entities as potential risks. Similarly, India’s Bombay Stock Exchange (BSE) turned down a listing application from a firm planning to invest proceeds in cryptocurrency, reflecting similar concerns.
Australia’s ASX has imposed a stricter limit, barring companies from holding more than 50% of their balance sheets in cash-like assets, including crypto. This restriction effectively makes DAT models “essentially impossible,” according to industry observers. An ASX spokesperson suggested that firms pivoting to crypto investments should consider structuring their offerings as exchange-traded funds (ETFs) instead.
**Japan Stands Out as an Exception**
In contrast, Japan’s stock exchanges have embraced DATs, provided they meet disclosure requirements. The country hosts the most DATs in Asia, including Metaplanet, the world’s fourth-largest Bitcoin treasury company. However, even in Japan, challenges loom. MSCI, a major index provider, is proposing to exclude large DATs with over 50% crypto holdings from its indexes, which could cut off passive investment flows and further destabilize the sector.
**Concerns Over “Listed Status” and Financial Integrity**
Regulators across Asia are wary of companies using stock exchange listings as a means to “sell their listed status” rather than operate legitimate businesses. The “cash company” issue remains a focal point, with officials emphasizing the need for listed firms to have real operations rather than functioning as mere investment vehicles. This concern stems from fears of misuse, such as money laundering or creating shell companies.
**Crypto Treasury Models Face a Crisis**
DATs, which once drove significant momentum in the crypto market, are now struggling. Many are trading at or below their net asset values (NAVs) as crypto prices have plummeted. Researchers at 10x Research argue that the “age of financial magic is ending for Bitcoin treasury companies,” citing declining share prices—particularly for Metaplanet. Even BitMine’s chairman, Tom Lee, recently suggested that the DAT bubble may have burst.
**The Road Ahead**
As regulatory scrutiny intensifies and market conditions deteriorate, the future of DATs remains uncertain. While Japan’s openness offers a glimmer of hope, the broader trend suggests a shift toward stricter oversight. For now, the sector faces a critical crossroads, balancing innovation with the need for stability and transparency.
This evolving landscape underscores the tension between fostering crypto innovation and safeguarding financial systems—a challenge that will define the next chapter of digital asset regulation.