As Bitcoin prices continue to hit new highs and a global wave of "Digital Asset Treasuries" (DAT) emerges, the three major stock exchanges in the Asia-Pacific region—Hong Kong Stock Exchange (HKEX), Bombay Stock Exchange (BSE) in India, and Australian Securities Exchange (ASX)—have simultaneously raised red flags regarding these "Bitcoin hoarding" listed companies. On October 22, Bloomberg reported that the Hong Kong Stock Exchange has rejected at least five companies' attempts to transform into DATs, the Bombay Stock Exchange denied Jetking Infotrain's application for a preferential allotment listing, and the Australian ASX has required transformers to pursue an ETF path while limiting the proportion of cash-like assets. This series of actions indicates that the DAT model is facing severe regulatory scrutiny globally, raising alarms about the compliance of listed companies' asset allocation in the Web3 era.

1. The "Encirclement" by the Three Major Exchanges in Asia-Pacific: Regulatory Resistance to the DAT Model

Bitcoin has risen 18% this year, largely due to numerous companies dedicated to hoarding Bitcoin. The model pioneered by Michael Saylor's $70 billion Bitcoin giant Strategy Inc. has spawned hundreds of imitators worldwide. However, in the Asia-Pacific market, the cautious stance of exchange operators may completely thwart the plans of cryptocurrency hoarders.

Hong Kong Stock Exchange (HKEX): In recent months, the Hong Kong Stock Exchange has questioned the plans of at least five companies seeking to make digital asset treasury strategies their core business, citing its "cash company" rules that prohibit substantial holdings of liquid assets. So far, none of these companies have received approval. Simon Hawkins, a partner at law firm Latham & Watkins, stated that for potential cryptocurrency accumulators, the success of obtaining approval depends on whether they can "prove that acquiring crypto assets is a significant part of their operational business." A spokesperson for the HKEX stated that its framework "ensures that all applicants seeking listing and those already listed have viable, sustainable, and substantive business operations."

Bombay Stock Exchange (BSE): Last month, the Bombay Stock Exchange rejected Jetking Infotrain's application for a preferential allotment listing. The company had indicated it would invest part of its proceeds in cryptocurrencies. A document shows that the company is appealing this decision.

Australian Securities Exchange (ASX): The Australian Securities Exchange prohibits listed companies from holding 50% or more of their balance sheet in cash or cash-like assets. Steve Orenstein, CEO of Locate Technologies Ltd., stated that this provision makes it "virtually impossible" to adopt a cryptocurrency fund management model. A spokesperson for the ASX indicated that for ASX-listed companies focused on investing in Bitcoin or Ethereum, "we encourage them to consider structuring their products as exchange-traded funds (ETFs)." Otherwise, they are "unlikely to be deemed suitable for formal listing."

2. Challenges for the DAT Model: Regulatory Concerns and Market Corrections

Resistance comes from cryptocurrency and listed instruments focused on accumulating cryptocurrencies, which are under increasing pressure, putting the digital asset boom that is expected to prevail for most of 2025 at risk.

"Cash Company" Rules: The HKEX's "cash company" rules aim to prevent shell companies from using their listing status to obtain funds. For DATs, if their assets primarily consist of liquid assets like cryptocurrencies, they may be deemed "cash companies," thus facing delisting risks.

Market Corrections: Recently, the purchasing volume of DATs has slowed, and their stock prices have declined, coinciding with a broader sell-off in the cryptocurrency market. According to a recent report by Singapore's 10X Research, retail investors have lost approximately $17 billion in DAT trading. Following the summer surge, the stock prices of Bitcoin hoarders have generally plummeted.

MSCI Index Exclusion Risk: MSCI, one of the world's largest index providers, recently proposed to exclude large DATs from its global indices after Metaplanet's $1.4 billion sale of international stocks in September triggered an investigation. MSCI suggested banning companies with cryptocurrency holdings of 50% or more of their total assets. Being excluded means DATs will no longer benefit from passive fund inflows from index-tracking funds, which could undermine the argument for a premium over book value.

3. Japan: An "Outlier" in the Asia-Pacific Region with Signs of Friction

Japan is a notable exception in the Asia-Pacific region. There, it is common for listed companies to hold substantial cash, and listing rules allow DATs to operate relatively freely.

Lenient Regulatory Environment: Hiromi Yamaji, CEO of Japan Exchange Group, stated, "Once a company is listed, if it makes appropriate disclosures—such as disclosing that it is purchasing Bitcoin—it is difficult to immediately conclude that such behavior is unacceptable."

Many Hoarders: According to BitcoinTreasuries.net, Japan has 14 listed Bitcoin buyers, the highest in Asia. This includes hotel operator Metaplanet Inc., an early adopter of this fund management model, which currently holds $3.3 billion worth of Bitcoin. Since its transformation began in early 2024, the company's stock price has soared, peaking at 1,930 yen in mid-June. Since then, the stock price has fallen by over 70%.

Signs of Friction: However, even for hoarders in Japan, there are signs of friction. MSCI proposed to exclude DATs holding ≥50% in crypto assets from global indices, which could affect companies like Metaplanet.

4. Digital Asset Treasury Industry: Dominated by U.S. Companies

Among the total of 1,043,341 Bitcoin held by global listed companies, U.S. companies dominate.

Strategy (US): 61.3%

Others: 26.4%

MARA Holdings (US): 5.1%

XXI (US): 4.2%

Metaplanet (Japan): 3.0%

This indicates that despite the cautious stance of the Asia-Pacific region towards the DAT model, U.S. companies still dominate the digital asset treasury industry.

Conclusion:

The resistance of the three major exchanges in Asia-Pacific to "Bitcoin hoarding" listed companies reflects the global regulatory scrutiny of new business models in the Web3 era. While the DAT model offers listed companies opportunities to allocate digital assets and enhance valuations, it also faces challenges such as "cash company" rules, market manipulation risks, and index exclusions. Against the backdrop of Bitcoin price volatility and a general decline in DAT stock prices, the cautious attitude of regulators aims to maintain market stability and protect investor interests. In the future, whether the DAT model can gain broader recognition and development globally will depend on its ability to demonstrate the viability, sustainability, and substance of its business within a compliance framework.

Related Reading: Ant Group and JD.com Halt Hong Kong Stablecoin Plans; What is the Logic Behind the "Emergency Brake"?

Original Article: “Hong Kong, India, and Australia Exchanges Push Back Against Bitcoin (BTC) Treasury Companies, What’s Going On?”

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