Asia-Pacific Stock Exchanges Tighten Rules on Crypto-Hoarding Companies

Three of Asia-Pacific’s largest stock exchanges are clamping down on companies seeking to transform into crypto hoarding vehicles, also known as digital-asset treasury (DAT) firms, according to a Bloomberg report. The pushback comes amid mounting regulatory scrutiny and growing volatility across the digital-asset market.

HKEX Blocks Digital-Asset Treasury Pivots

As reported by Bloomberg, Hong Kong Exchanges & Clearing Limited (HKEX) has recently challenged the plans of at least five publicly traded firms attempting to pivot toward digital-asset treasury strategies as their core business. The exchange cited listing rules that prohibit companies from holding large portions of liquid assets, such as cryptocurrencies, on their balance sheets.

None of the firms’ proposals have been approved so far. Similar resistance has emerged in India and Australia, posing a major obstacle to the proliferation of crypto accumulation companies in the region.

The regulatory caution comes at a pivotal moment for the market. Bitcoin (BTC), which hit a record US$126,251 on October 6, has gained 18% year-to-date, with much of the surge driven by companies modeled after Michael Saylor’s US$70 billion Bitcoin giant, Strategy. However, Bloomberg notes that as DAT share prices fall and crypto markets cool, enthusiasm is waning. A report from Singapore-based 10X Research estimates that retail investors have already lost US$17 billion through DAT trades.

“The clarity and flexibility of listing regulations directly influence how cleanly a digital-asset treasury model can operate,” said Rick Maeda, a Tokyo-based crypto analyst at Presto Research. “Predictable frameworks attract capital, while restrictive ones slow execution.”

Hong Kong’s ‘Cash Company’ Barrier

Under HKEX rules, firms primarily holding cash or short-term investments can be deemed “cash companies” and risk share suspension. The rule aims to prevent shell entities from exploiting their listed status for fundraising.

According to Simon Hawkins, a partner at Latham & Watkins, any company pursuing a crypto pivot must prove that digital-asset accumulation is integral to its operating business. For now, full-scale transitions into pure crypto treasuries are not permitted for listed firms in Hong Kong.

An HKEX spokesperson told Bloomberg that the exchange’s listing framework ensures all listed entities maintain viable, sustainable, and substantive operations.

India and Australia Restrict DAT Models

In India, the Bombay Stock Exchange (BSE) last month rejected Jetking Infotrain’s attempt to list shares from a preferential allotment after the firm revealed plans to invest part of the proceeds in crypto. Jetking has since appealed the decision.