Japan Exchange Group Seeks to Tighten Oversight of Crypto Treasury Firms
Digital asset treasury firms in Japan are facing increased scrutiny as the Japan Exchange Group Inc., operator of the Tokyo Stock Exchange, considers stricter oversight due to concerns over retail investors’ exposure to excessive risk from volatile crypto-related stocks.
The Japan Exchange Group is weighing the introduction of new audits and a stricter disclosure regime for listed companies that store cryptocurrencies, according to people familiar with the development. This move aims to protect investors and ensure that listed companies remain grounded in their stated business activities.
Key Developments and Concerns
The group is also exploring ways to curb backdoor listings, a method by which a private company is taken public through a merger or acquisition of an already listed company. While existing rules already limit this approach, the exchange is now considering whether it should be applied to listed companies that have adopted a cryptocurrency-focused treasury strategy.
- The Japan Exchange Group may require listed companies that store cryptocurrencies to undergo new audits and adopt a stricter disclosure regime.
- Shares of major Japanese crypto treasury firms, including Metaplanet and Convano Inc., have fallen sharply in recent months.
- Similar resistance can be seen in some other jurisdictions in Asia, such as Hong Kong and India.
Japan is home to several digital asset treasury firms, including Metaplanet Inc., the country’s largest public Bitcoin holder. However, many of these firms have seen their share prices plunge as market enthusiasm waned. Metaplanet, for example, has fallen more than 70% since its peak in June, despite rising over 400% earlier this year due to aggressive Bitcoin buying.
Regulatory Environment and Comparisons
Crypto hoarding companies have faced similar problems in other jurisdictions in Asia. Last month, Hong Kong Exchanges & Clearing Limited reportedly blocked at least five companies that sought to pivot their core business toward holding digital assets as treasury reserves. Similar measures were taken in India, where the Bombay Stock Exchange rejected Jetking Infotrain’s proposal to invest proceeds from a preference share issue in cryptocurrencies.
No formal decision has been announced so far, but some companies have been warned by the exchange that they risk restrictions on fundraising if they pursue cryptocurrency accumulation as a core business strategy. As a result, at least three companies have put their plans on hold, according to sources.
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