(Nov 13): Japan Exchange Group Inc (JPX) is mulling measures to limit the growth of listed digital-asset treasury companies, as concerns deepen over losses connected to the crypto hoarding frenzy.
The Tokyo Stock Exchange operator is exploring options including a stricter application of its backdoor listing rules and requiring firms to undergo a fresh audit, according to people familiar with the matter, who asked not to be named as the plans are private. No official course of action has been determined at this point, they added.
Since September, three listed Japanese companies have put plans to start buying cryptocurrencies on hold due to pushback from JPX, according to one of the people. Those companies have been told their fundraising abilities will be restricted if they pursue buying crypto as a business strategy, the person said.
The bourse does not currently have any overarching regulations against listed companies accumulating crypto, but is “monitoring companies that raise concerns from a risk and governance perspective, with a view to protecting shareholders and investors,” a JPX representative wrote in an email.
After booming earlier this year, crypto hoarding stocks built in the mold of Michael Saylor’s Strategy Inc have fallen sharply, saddling retail investors with heavy losses. Shares in Strategy, which has amassed a Bitcoin pile worth about US$66 billion, have roughly halved since mid-July.
Against that backdrop, stock exchanges in Hong Kong and across the Asia-Pacific region have resisted efforts to set up new digital-asset treasury companies, or DATs. In contrast, Japan has 14 listed Bitcoin-buyers, the most in Asia, according to BitcoinTreasuries.net data.
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A backdoor listing typically involves a private company going public on a stock exchange through a merger or acquisition, bypassing the normal initial public offering process. JPX already bars backdoor listings, and is exploring whether to apply that prohibition to listed companies that shift their core business operations to crypto accumulation, the people said.
The potential crackdown was sparked by fears that domestic investors have been hurt by the recent retreat in local DATs’ shares, according to the people.
Tokyo-listed Metaplanet Inc, by far Japan’s largest DAT operator, has seen its shares plunge over 75% from a mid-June peak, after surging about 420% earlier in the year. The firm has amassed over 30,000 Bitcoin since pivoting to crypto from hotels in early 2024, making it the world’s fourth-largest public Bitcoin holder. Shares in nail salon operator Convano Inc, which aims to acquire 21,000 Bitcoin, are down about 60% since late August.
Uploaded by Felyx Teoh
