Asia Exchanges Push Back on Crypto-Hoarding Companies

Three of Asia Pacific’s biggest stock exchanges are taking a strong stand against companies that are trying to turn themselves into crypto-hoarding businesses.

The Hong Kong Exchanges & Clearing Ltd., along with the Bombay Stock Exchange in India and the Australian Securities Exchange, are rejecting or challenging plans from firms seeking to hold digital assets like Bitcoin as their main business strategy, as reported by Bloomberg.

These moves, which have happened throughout the year, are based on rules that stop listed companies from becoming “cash companies,” meaning firms that mainly hold money or liquid assets instead of running real business operations.

Hong Kong Leads the Crackdown

In Hong Kong, at least five companies have recently applied to change their main focus to buying and holding digital assets, but none have been approved. The exchange argues that listed firms must show their business is “viable, sustainable, and of substance.” 

This means companies cannot simply shift to buying and holding crypto without an operational purpose. Simon Hawkins, a partner at Latham & Watkins, said approval depends on proving that acquiring crypto is “part and parcel of their operating business.”

India and Australia Follow Strict Rules

In India, the Bombay Stock Exchange recently rejected Jetking Infotrain’s plan to list shares from a new allotment. The company had planned to invest some proceeds in crypto. Jetking has appealed the decision, but both it and the BSE have declined to comment, according to Bloomberg. 

Meanwhile, in Australia, ASX Ltd. rules make it nearly impossible for firms to hold 50% or more of their balance sheet in cash or similar assets.

The ASX said that firms wanting to hold crypto directly should instead consider creating exchange-traded funds, or ETFs, for investors. “Otherwise, they are unlikely to be considered suitable for admission,” an ASX spokesperson said.

Japan Stands Out with a Softer Approach

Japan stands apart as an exception. There, companies are allowed to hold large amounts of Bitcoin, as long as they make proper disclosures. One of the most popular examples is Metaplanet Inc., a hotel operator. The firm began its shift in early 2024 and now holds about $3.3 billion in Bitcoin, though its shares have dropped over 70% from mid-year highs.

However, even Japan’s approach is facing pressure as MSCI Inc., a global index provider, is considering removing such companies from its indexes, saying they “may act more like investment funds.”

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