Simply put
- Stock exchanges in Hong Kong and India have turned down requests from companies wanting to adopt Bitcoin treasury strategies, with no approvals granted in recent months.
- Experts are raising concerns about the credibility of digital asset bonds, suggesting they might become mere tools for “volatility arbitrage under the guise of Bitcoin leverage,” which could harm individual investors.
- Siddarth Bharwani from Jetking Infotrain mentioned that the ongoing regulatory fragmentation in Asia is leading many founders to consider moving their operations offshore.
Asia’s primary stock exchanges are pushing back against companies attempting to shift to digital asset treasury, citing a need to guard markets against “extreme volatility risks.”
Recently, the Hong Kong Exchange and Clearing Authority has denied five applications from firms looking to implement Bitcoin treasury strategies, according to insiders. Bloomberg reported on this trend.
Last month, India’s Bombay Stock Exchange rejected JetKing Infotrain Ltd.—the first listed company in India aiming to embrace the Bitcoin standard. The IT training firm plans to dedicate 60% of its revenue to Bitcoin.
In Australia, the ASX has established rules preventing listed companies from holding more than half of their assets in cash or cash-equivalent forms, which effectively stifles any digital asset treasury transitions.
According to Mr. Joshua Chew, a legal expert and co-chairman at the Hong Kong Web3 Association, the regulatory divide across Asia might persist as each region highlights different policy goals.
He pointed out that while Singapore focuses on regulating payments and tokenized payment systems, Hong Kong leans more towards product governance and ensuring investor protection. India appears to be taking a stricter approach to crypto activities, while Australia maintains a cautious yet proactive stance.
This regulatory push follows a report from 10X Research, which estimates that retail investors have faced around $17 billion in losses from trading digital assets linked to government bonds.
Companies adopting Bitcoin financial strategy
This backlash coincides with a rise in global firms adopting the Bitcoin financial model popularized by Michael Saylor, now a mainstream approach estimated at around $70 billion in Bitcoin.
Recently, Citi gave this strategy a buy rating with a target price of $485, but issued a cautionary note regarding significant risks due to its leveraged position related to Bitcoin; even minor drops in Bitcoin’s price could lead to severe shareholder losses.
A prediction market associated with Myriad indicates that users largely expect the strategy to continue its Bitcoin acquisition, with only a 7% chance of any companies selling Bitcoin this year.
Chu raised concerns about whether digital asset treasuries (DATs) are justified, emphasizing that without a solid business rationale and stringent governance, they could diverge from shareholder interests and stir liquidity and governance issues—something regulators are wary of.
He cautioned against relaxing traditional corporate norms surrounding crypto treasury, which serve to protect against “shells of volatility arbitrage disguised as Bitcoin strategies” that resulted in recent retail losses.
“Traditional corporate governance should still apply to digital asset vaults,” he asserted, moving to remind that loosening regulations could mirror the “speculative frenzy without returns” we saw during the dot-com bubble.
Siddarth Bharwani expressed that the appeal to the Securities Court of Appeals following the BSE’s rejection was meant for clarification, not confrontation.
He noted that the rejection missed an opportunity to see how publicly traded firms in India could innovate responsibly on Bitcoin to benefit long-term shareholder interests.
Bharwani remarked on India’s unique challenges; despite a desire for digital assets, ambiguity is pushing founders to explore offshore options.
He mentioned that while countries like Japan and the UAE are actively cultivating regulatory frameworks, regions such as India, Hong Kong, and Australia ought to more openly support innovation in this area.
