- Stock exchanges in India, Hong Kong, and Australia are restricting companies from using digital assets as core treasury holdings.
- Hong Kong Exchanges & Clearing Ltd. has denied at least five companies seeking to become digital asset treasury vehicles (DATs) due to rules against “cash companies.”
- The Bombay Stock Exchange rejected a company’s listing after it announced plans to invest in crypto assets.
- Australia’s ASX prohibits companies from holding over half their assets in cash-like investments such as crypto, effectively blocking DAT models.
- Japan remains open to DATs, allowing 14 listed Bitcoin holders, though index provider MSCI plans to exclude DATs with more than 50% crypto holdings from its indexes.
Stock exchanges in India, Hong Kong, and Australia have recently started blocking or limiting companies from becoming digital asset treasury vehicles, or DATs. These companies mainly hold cryptocurrencies or other liquid digital assets as part of their treasury strategy, a practice now facing regulatory resistance. The actions aim to ensure listed firms conduct real business operations rather than acting as investment holding entities.
Hong Kong Exchanges & Clearing Ltd. has rejected at least five applications from companies wanting to convert into DATs. The reasons cited include rules against “cash companies,” which are firms that primarily hold liquid assets and may resemble shell companies rather than active businesses. Last month, the Bombay Stock Exchange also refused to list a company after it announced plans to invest its proceeds into cryptocurrencies.
In Australia, the ASX has rules that prevent companies from holding more than 50% of their assets in cash-like investments, including cryptocurrencies. This policy makes the DAT model effectively unviable. An ASX spokesperson said companies wishing to invest in crypto are advised to consider structuring their offering as exchange-traded funds (ETFs).
Japan is an exception in the region, continuing to allow DATs with full disclosure requirements. The country hosts 14 listed Bitcoin buyers, including Metaplanet, the world’s fourth-largest Bitcoin-focused DAT in terms of holdings. However, index provider MSCI has proposed excluding large DATs with more than 50% cryptocurrency holdings from its indexes, which may limit passive investment flows to these companies.
Stock exchanges are concerned that some DATs may be selling their “listed status” rather than conducting genuine business activities. Regulators want to avoid companies acting as empty shell entities holding liquid assets without regular operations. The challenges faced by DATs also reflect recent market corrections; many are trading at or below their net asset values, indicating investor skepticism.
Researchers at 10x Research noted the “age of financial magic is ending for Bitcoin treasury companies,” pointing specifically to the declining share prices of firms like Metaplanet. Additionally, BitMine chair Tom Lee suggested earlier this month that the DAT bubble could be deflating.
For further information, see the original article on the Bloomberg report.
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