Hong Kong’s SFC reviews digital asset treasuries as investor losses mount

Chairman Kelvin Wong warns of inflated DAT share prices.
Boyaa Interactive and Ourgame International among affected firms.
India and Australia also move to curb crypto-heavy listings.

Hong Kong’s Securities and Futures Commission (SFC) has intensified its scrutiny of listed firms with digital asset treasuries (DATs) after findings suggested retail investors may have lost billions trading these stocks.

The regulator is concerned that share prices of some companies may be trading well above the value of their crypto holdings, raising questions about investor protection and market transparency.

The move comes amid growing global unease over corporate exposure to digital assets, with regulators in Hong Kong, India, and Australia tightening oversight of firms integrating crypto into their balance sheets.

SFC flags risk of inflated share valuations

SFC chairman Kelvin Wong Tin-yau said the regulator is closely monitoring how listed firms manage their crypto assets, as some share prices may not reflect the true value of their holdings.

Wong pointed to examples from the United States where companies with digital asset exposure saw valuations soar to more than double the cost of their crypto portfolios.

Findings from Singapore-based 10X Research earlier this month indicated that retail investors may have collectively lost around $17 billion trading digital asset treasury firms.

Many of these losses stemmed from investors purchasing shares at a premium far above the company’s net asset value.

Some of Hong Kong’s most active DAT firms, including Boyaa Interactive and Ourgame International, have seen their stock performance weaken amid the crypto market’s volatility.

The SFC’s growing concern reflects a broader effort to assess whether such firms pose risks to financial stability, particularly when share prices are driven more by speculative demand than by operational performance.

Regulators move against rebranding attempts

Authorities in Hong Kong have already taken measures against companies attempting to rebrand themselves as crypto-holding entities without substantial business operations.

The SFC cited listing rules that limit firms from maintaining excessive liquid assets, including cryptocurrencies, on their balance sheets without demonstrating a clear operational rationale.

Wong stated that investors should “fully understand the underlying risks of DAT,” adding that the commission plans to expand its public education campaigns to help retail traders understand how digital asset treasuries function and the market volatility they may face.

Once its review is complete, the SFC will determine whether specific guidelines are required for DATs, as Hong Kong currently lacks a framework governing listed companies investing directly in cryptocurrencies.

Global caution spreads across markets

Regulatory caution is not limited to Hong Kong. Earlier this month, similar developments emerged in India and Australia, where exchanges raised concerns about listed firms shifting large portions of their capital into crypto holdings.

In Australia, the Australian Securities Exchange (ASX) restricts listed firms from holding more than 50% of their assets in cash or cash-like instruments, a rule that complicates attempts to build crypto-heavy balance sheets.

In India, the Bombay Stock Exchange recently rejected a listing proposal from Jetking Infotrain due to its plans to allocate funds toward digital assets.

Across jurisdictions, regulators are increasingly aligning on the need for clearer oversight of corporate crypto exposure.

Industry concerns over unsustainable models

Experts within the crypto industry have expressed concern that many DAT companies operate without robust governance structures or defined risk controls.

Without clear strategies for managing asset volatility or liquidity shocks, retail investors could face sharp losses during market downturns.

While digital asset treasuries offer firms a new way to diversify holdings, regulators argue that such moves must be backed by sound business fundamentals rather than speculative enthusiasm.

The SFC’s review marks an important step in defining how listed companies can responsibly integrate crypto into their financial strategies without endangering shareholders.