Asian Regulators Clamp Down on Public Companies Disguising Crypto Holdings

Regulatory storm hits Asian exchanges as authorities expose listed firms hiding massive cryptocurrency positions.

The Compliance Crackdown Intensifies

Financial watchdogs across major Asian markets are deploying unprecedented scrutiny measures—forcing transparency on corporate balance sheets that have been quietly accumulating digital assets. The regulatory sweep targets companies using creative accounting to mask their crypto exposure from shareholders and regulators alike.

Market Impact and Investor Fallout

Several blue-chip names face immediate trading suspensions and potential delisting proceedings as investigations reveal substantial undisclosed cryptocurrency portfolios. The crackdown exposes how traditional corporate structures have been repurposed as stealth crypto investment vehicles—because nothing says 'stable earnings' like volatile digital assets that could tank 50% before lunch.

Asian exchanges now demand full disclosure of all digital asset holdings, forcing companies to choose between divesting their crypto positions or facing regulatory wrath. The move signals a broader purification of public markets from the speculative fever that's been infecting corporate treasury departments.

Hong Kong moves to rein in digital treasuries

Hong Kong Exchanges & Clearing Ltd. (HKEX) has reportedly either rejected or challenged at least five firms seeking to transition into treasury models centered on digital assets over the past few months, citing listing rules that prohibit maintaining a large liquid position of holdings. None of the apps has been approved.

A rule of the exchange classifies companies with majority assets in cash or short-term investments as “cash companies,” which may be suspended or delisted. The policy aims to discourage shell companies from exploiting their listed status to generate speculative gains.

“Listing regulations directly shape how fast and how cleanly a digital-asset treasury model can operate,” said Rick Maeda, a Tokyo-based crypto analyst at Presto Research. Rules that are “predictable and accommodative” attract capital and boost investor confidence, while harsher environments hinder DATs’ execution speed, he added.

An HKEX spokesperson stated that the exchange’s framework ensures all listed and applying companies maintain “viable and sustainable” business operations.

India and Australia follow suit

In India, the Bombay Stock Exchange (BSE) recently rejected Jetking Infotrain’s application to issue new shares via preferential allotment after the company announced plans to invest part of the proceeds in crypto assets. The firm has appealed the decision, as stated in regulatory filings.

Australia has adopted a similarly cautious stance. The Australian Securities Exchange (ASX) bars listed companies from holding more than 50% of their balance sheets in cash or cash-like assets, a rule that effectively blocks the DAT model.

Software firm Locate Technologies Ltd., which began purchasing bitcoin earlier this year, is now shifting its listing to New Zealand, where the NZX has shown greater openness to hosting DATs.

An ASX spokesperson said that while crypto treasury strategies aren’t explicitly banned, firms pursuing them should consider structuring their exposure as exchange-traded funds (ETFs) to comply with listing standards.

Japan stands out as the only major Asia-Pacific market where listed companies can freely adopt digital-asset treasury strategies. Local regulations permit firms to maintain substantial cash reserves, offering greater flexibility to invest in Bitcoin.

“Once a company discloses it is purchasing Bitcoin, it’s difficult to conclude that such actions are unacceptable,” said Hiromi Yamaji, CEO of Japan Exchange Group, in a September press conference.

Japan currently leads the region with 14 listed Bitcoin-holding firms, according to BitcoinTreasuries.net. Among them is hotel operator Metaplanet Inc., which holds roughly $3.3 billion in Bitcoin. The company’s stock soared earlier this year before falling more than 70% from its June peak.

However, even Japan’s DAT-friendly landscape may be changing. MSCI Inc., one of the world’s largest index providers, has proposed excluding DAT-heavy firms from its global indexes, arguing they resemble investment funds. The move followed Metaplanet’s $1.4 billion share sale in September, with most proceeds directed toward Bitcoin purchases.

Travis Lundy, Japan equity analyst at Smartkarma, warned that if MSCI’s proposal goes through, it could strip DATs of passive fund inflows and remove their valuation premium.” 

The divergent approaches across Asia highlight the ongoing regulatory challenge of striking a balance between innovation in digital asset management and investor protection.

While Japan’s flexible rules have encouraged experimentation, Hong Kong, India, and Australia are tightening oversight to maintain market integrity and avoid speculative excesses.

For now, the DAT model, which once symbolized corporate enthusiasm for crypto, is losing momentum as regulators remind markets that digital-asset accumulation, without a sustainable business behind it, remains a risky proposition.

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