India, Hong Kong, Australia Block Firms Turning to Crypto Treasuries

TLDR

• Hong Kong Exchanges & Clearing Ltd. has rejected several companies trying to become crypto treasuries.
• The Bombay Stock Exchange declined to list the company after it announced plans to invest in cryptocurrency.
• Australia’s ASX limits firms from holding over 50% of their assets in crypto or similar liquid assets.
• Japanese exchanges continue to permit crypto treasuries, provided they are accompanied by proper disclosures and regulatory compliance.
• MSCI is proposing to exclude large crypto treasuries from its indexes due to their high exposure to cryptocurrencies.

Several stock exchanges across Asia are tightening rules on crypto treasuries. Regulatory concerns have led to rejections and restrictions. Authorities aim to prevent listed firms from acting solely as holders of digital assets.

India, Hong Kong Clamp Down on Crypto Treasuries

Hong Kong Exchanges & Clearing Ltd. has blocked multiple digital asset treasury (DAT) proposals in recent months. The exchange cited rules that restrict “cash companies” from holding mainly liquid assets, such as crypto. Sources told Bloomberg that at least five DAT attempts were denied this year.

The Bombay Stock Exchange rejected a listing after the applicant revealed intentions to invest proceeds into crypto treasuries. This action aligns with India’s strict stance on firms using their listing status to gain exposure to cryptocurrencies. Regulators want companies to operate real businesses and avoid being passive holding vehicles.

In both markets, crypto treasuries have drawn scrutiny for appearing like empty shells without operational output. Exchanges have expressed concerns over firms selling their listings rather than offering actual business models. This stance highlights a broader crackdown on speculative financial practices.

Australia Bars High Exposure to Crypto Treasuries

Australia’s ASX also discourages the rise of crypto treasuries by capping holdings in liquid assets. Under ASX policy, listed companies are prohibited from holding more than 50% of their holdings in cryptocurrencies or cash-like instruments. This effectively eliminates the DAT model in Australia.

A spokesperson confirmed that companies planning significant crypto exposure must explore alternatives, such as ETFs. “ASX-listed firms are encouraged to consider structuring their offering as an exchange-traded fund,” the spokesperson stated. This approach enables investors to engage with cryptocurrency through regulated investment products.

Australia’s position reflects a desire to control systemic risk and maintain clear corporate transparency. Crypto treasuries are viewed as volatile, especially during market corrections. Authorities believe public companies should maintain solid operational foundations.

Japan Welcomes Crypto Treasuries, But Risks Loom

Japan remains open to crypto treasuries, provided they are adequately disclosed. The country currently hosts 14 listed Bitcoin treasury firms. Metaplanet, the fourth-largest globally, leads the list among Japanese DATs.

However, index provider MSCI plans to exclude large crypto treasuries from its indexes. Companies holding over 50% of their assets in crypto may lose passive investment flows. This move could impact stock performance and limit capital access.

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