Encryption reserve companies face obstacles! The three major stock exchanges in the Asia-Pacific region have strict listing controls, and MSCI recommends excluding DAT from the index.

According to Bloomberg, the three major stock exchanges in the Asia-Pacific region are cracking down on cryptocurrency hoarding tools disguised as listed companies, including the strict regulation of the digital asset financial company (DAT) in Hong Kong, India, and Australia. The index company MSCI has also suggested excluding DAT from the index, leaving even Metaplanet, which is friendly to DAT in Japan, in a difficult situation.

The exchanges in Hong Kong, India, and Australia strictly regulate the listing of DAT.

Insiders have revealed that in recent months, the Hong Kong exchange has questioned the plans of at least five companies seeking to make digital asset financial strategies their core business. According to the rules of the Hong Kong exchange, if a listed company's assets are primarily composed of cash or short-term investments, it will be regarded as a “cash company,” and its shares may be suspended. This move aims to prevent shell companies from using their listing status to exchange for cash.

A spokesperson for the Hong Kong Stock Exchange declined to comment on specific companies that have been questioned, but stated that its framework is to “ensure that all applicants seeking to list, as well as those already listed, have businesses and operations that are viable, sustainable, and substantive.”

These so-called digital asset financial companies (DAT) have encountered similar opposition in India and Australia. The Bombay Stock Exchange in India rejected Jetking Infotrain's priority allocation listing application last month, which the company stated would invest part of its profits in Crypto Assets.

The Australian Securities Exchange ( ASX Ltd. ) prohibits listed companies from holding 50% or more of their balance sheet in cash or similar cash assets, which makes the adoption of a cryptocurrency fund management model “virtually impossible.” An ASX spokesperson stated that for ASX-listed companies focusing on investing in Bitcoin or Ethereum, “we encourage them to consider structuring their products as exchange-traded funds ( ETF ).” Otherwise, they are “unlikely to be recognized as suitable for formal listing.”

The Japanese exchange is friendly to DAT.

Japan is a notable exception in the Asia-Pacific region. There, it is common for listed companies to hold a substantial amount of cash, and the listing rules also allow DAT to operate with relative freedom.

Hiromi Yamaji, the CEO of the Japan Exchange Group, stated at a press conference on September 26:

“If a company goes public and makes appropriate disclosures, it is difficult to immediately conclude that such behavior is unacceptable.”

According to data from BitcoinTreasuries.net, Japan has 14 publicly listed Bitcoin buyers, the highest in Asia, including hotel operator Metaplanet, which is an early adopter of this fund management model and currently holds Bitcoin valued at $3.3 billion. Since its transformation began in early 2024, the company's stock price skyrocketed, reaching a peak of 1,930 yen in mid-June. Since then, the stock price has fallen by nearly 80%.

(Gerovich simulates an 8.6 times mNAV share issuance effect. Can 6% preferred shares save Metaplanet? )

The index company MSCI has suggested excluding DAT from the index.

One of the world's largest index providers, MSCI, recently proposed to exclude large DAT from its global indices, and Metaplanet's sale of $1.4 billion in international stocks in September triggered an investigation. Metaplanet joined the MSCI Japan Index in February and was subsequently included in the FTSE Japan and Global Indexes in August.

MSCI stated in an announcement that DAT may exhibit characteristics similar to investment funds and does not meet the eligibility for MSCI indices. MSCI recommends excluding companies with cryptocurrency holdings accounting for more than 50% of their total assets from the MSCI All Country Investable Market Index.

This article discusses how encryption reserve companies are facing obstacles! The three major exchanges in the Asia-Pacific region are strictly controlling listings, and MSCI recommends excluding DAT from the index, first reported by Chain News ABMedia.