Tokyo Exchange Operator Mulls Limits on Digital Asset Treasury Firms: Report
Japan Exchange Group (JPX), operator of the Tokyo Stock Exchange, is considering tighter regulations to address the rise of listed companies holding digital assets as treasury. Measures being explored include stricter enforcement of backdoor listing rules and new audits, aiming to protect investors. In recent months, JPX has warned at least three firms against crypto-focused asset strategies. Despite lacking explicit regulations against such practices, JPX is cautious due to the volatility of crypto markets, which have caused significant losses for retail investors. Japan currently leads Asia with 14 publicly listed bitcoin-holding companies, including Metaplanet, whose shares have dropped over 70% since June.
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Rising Concerns Over Digital Asset Treasuries in Japan
The heat is rising on digital asset treasuries in the Far East. Japan Exchange Group (JPX), which operates the Tokyo Stock Exchange, is actively considering measures to curb the growth of listed companies using digital tokens as treasury assets, as reported by Bloomberg.
Potential Measures by JPX
The bourse is exploring steps such as stricter enforcement of backdoor listing rules and conducting fresh audits on firms that lean heavily into crypto. These measures aim to protect investor interests amidst the rising influence of digital assets.
Earlier Warnings to Companies
Since September, JPX has already taken action against three Japanese companies intending to evolve into digital asset treasuries. These companies were warned of fundraising restrictions if they adopt crypto accumulation as a core corporate strategy.
Governance and Regulation
JPX is closely monitoring such firms from a governance and shareholder protection standpoint, though it lacks specific regulations explicitly banning listed firms from hoarding crypto. This reflects a cautious approach in dealing with the inherent risks of digital assets.
Volatility and Investor Losses
The caution toward digital asset treasuries arises from the volatile boom-and-bust patterns witnessed in these stocks, which have caused significant losses for retail investors in the past.
Japan’s Leadership in Crypto Holdings
Japan leads Asia with 14 publicly listed bitcoin-holding companies, illustrating its prominent role in the digital asset space. Among these is Metaplanet, a Tokyo-listed firm that holds over 30,000 BTC. However, shares of Metaplanet have plummeted over 70% since their peak in June, highlighting the risks attached to such investments.