Asia's Stock Exchanges Clamp Down on Crypto Treasury Listings

Asia's top stock exchanges in Hong Kong, India, and Australia are imposing stricter rules on companies seeking to list while holding large cryptocurrency reserves as part of their treasury strategies.

The move targets Digital Asset Treasury (DAT) firms that hold significant portions of their assets in cryptocurrencies like Bitcoin, restricting their ability to list under traditional corporate frameworks due to concerns over liquidity, market volatility, and regulatory compliance.

Regulators Target Crypto-Hoarding Firms

The Hong Kong Exchanges & Clearing Limited (HKEX) has recently rejected at least five listing applications from companies aiming to become crypto treasury vehicles.

The exchange cited prohibitions on "cash companies" with excessive liquid holdings, highlighting the risk of speculative investments detached from core business operations.

Also, in India, the Bombay Stock Exchange (BSE) turned down a firm's application that intended to invest listing proceeds heavily into cryptocurrency, emphasizing standard listing rules that prioritize business activity over asset hoarding.

Similar restrictions exist in Australia, where the Australian Securities Exchange (ASX) bars firms from holding more than 50% of their assets in cash or short-term equivalents, making crypto treasury models difficult to implement.

Contrasting Rules Across Asia-Pacific

While several Asian financial hubs are tightening listing requirements, Japan stands out with a more permissive stance.

Japanese exchanges allow public companies to maintain significant Bitcoin holdings, with at least 14 firms openly holding crypto assets on their balance sheets.

However, this leniency faces growing scrutiny as global index providers like MSCI propose excluding companies whose crypto holdings exceed half their total assets, aiming to reduce market risk exposure.

Industry voices note that clear regulatory frameworks are crucial for enabling crypto treasury strategies.

Restrictions imposed by exchanges could slow the adoption and capital flow into these models.

This regulatory pushback comes amidst heightened volatility in the digital asset market, with companies previously capitalizing on rising Bitcoin prices now facing increased investor wariness and share price drops.