Stock exchanges across Asia are tightening oversight on firms that convert their balance sheets into cryptocurrency holdings.
According to a Bloomberg report released Wednesday, regulators in Hong Kong, India, and Australia have recently rejected or restricted such business models.
Digital Asset Treasury (DAT) companies typically hold a significant portion of their assets in cryptocurrencies such as Bitcoin, rather than operating traditional businesses. The structure gained traction earlier this year as firms sought exposure to digital assets without creating new products.
Hong Kong Rejects Multiple DAT Applications
The Hong Kong Exchanges & Clearing Ltd. (HKEX) has reportedly rejected at least five applications from companies aiming to become DATs.
Anonymous sources told Bloomberg that the exchange cited rules prohibiting “cash companies,” or firms whose primary holdings are liquid financial assets rather than revenue-generating operations.
Regulators fear these entities could function as empty shells, which might enable them to attract speculative investment. Such a practice could undermine the creation of genuine enterprises.
India and Australia Impose Listing Barriers
The Bombay Stock Exchange (BSE) took a similar stance last month when it denied a listing request from a firm planning to invest its proceeds in cryptocurrencies. Officials reportedly viewed the proposal as inconsistent with listing norms that emphasize active business operations.
In Australia, the Australian Securities Exchange (ASX) enforces rules that prevent listed firms from holding more than half of their assets in cryptocurrency or cash equivalents.
The ASX has indicated that companies seeking to focus on digital assets should instead consider exchange-traded fund (ETF) structures.
Japan Emerges as the Regional Exception
While its Asian peers tighten restrictions, Japan continues to permit DAT listings under strict disclosure standards. The country currently hosts 14 listed firms holding Bitcoin, including Metaplanet, recognized as the fourth-largest digital asset treasury globally.
Japan’s openness reflects its long-standing regulatory approach, emphasizing transparency rather than prohibition. This has allowed Tokyo’s exchanges to become a hub for publicly listed crypto treasury companies.
Meanwhile, outside Asia, the MSCI index group is also reviewing its approach. The company is reportedly considering excluding large DATs, those with more than 50% of assets in cryptocurrencies, from its major indexes.
If implemented, this move could limit access to passive investment funds that track MSCI benchmarks, reducing liquidity for affected firms.
Regulatory Concerns Over Shell Companies
Exchanges have expressed unease that some DAT applicants might be using their listed status for financial engineering rather than building real operations.
This echoes broader global worries about “cash companies”, entities holding mostly liquid assets without substantive business activity. Regulators believe this structure could be misused for speculative or improper purposes.
Market Downturn Puts Pressure on DATs
While DATs attracted significant investor interest earlier this year, recent downturns in crypto markets have left a portion of them trading below their net asset value (NAV).
Analysts at 10x Research noted that “the age of financial magic is ending for Bitcoin treasury companies,” referencing the poor performance of firms like Metaplanet.
Even BitMine chair Tom Lee suggested this month that the DAT boom may be fading. He observed that investors are withdrawing from high-risk cryptocurrency exposure.
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