Stock exchanges in India, Hong Kong, and Australia are tightening rules against companies trying to turn themselves into digital asset treasuries (DATs) — firms that hold large portions of their balance sheets in crypto.

According to a Bloomberg report, Hong Kong Exchanges & Clearing Ltd. has already rejected at least five such companies, citing rules that prevent “cash companies,” or businesses that mainly hold liquid assets instead of running real operations.

In India, the Bombay Stock Exchange reportedly denied a company’s listing last month after it revealed plans to invest proceeds into cryptocurrencies.

Over in Australia, the ASX also limits companies from holding more than half of their balance sheets in crypto or other cash-like assets. An ASX spokesperson added that firms looking to gain crypto exposure should instead explore exchange-traded fund (ETF) structures.

Japan Stands Apart

While most regional exchanges are pushing back, Japan remains an exception. The country still allows DATs, as long as they provide proper disclosure. Japan now hosts the largest number of listed Bitcoin-holding firms in Asia — 14 in total — including Metaplanet, the world’s fourth-largest Bitcoin DAT.

Some bourses have expressed concern about these companies selling their “listed status” rather than running legitimate operating businesses, Bloomberg reported.

There is also the “cash company” issue with firms holding mostly liquid assets, potentially looking like empty shell companies that could be used for improper purposes.

Regulators also want listed companies to have real operations, not just be investment vehicles holding assets, it stated.

DAT Model Losing Steam

Crypto treasury companies played a major role in the crypto rally earlier this year, but momentum is fading. Many DATs now trade at or below their net asset values (NAVs) as the market corrects.

Researchers at 10x Research said the “age of financial magic is ending for Bitcoin treasury companies,” citing sharp declines in share prices — especially for Metaplanet. Even BitMine chair Tom Lee recently admitted the DAT bubble might have burst.

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