Japan Exchange Group Considers Crackdown on Crypto-Hoarding Firms
- Japan Exchange Group plans stricter rules to limit crypto hoarding among listed firms.
- JPX warns companies may face financing limits if crypto buying remains their main strategy.
- Metaplanet and other DATs suffer sharp losses, triggering investor protection concerns.
Japan’s main stock exchange is preparing tighter oversight of listed companies that hold large amounts of cryptocurrency. The move follows steep losses among digital-asset treasury firms, which have drawn growing concern from regulators and retail investors.
JPX Eyes New Rules for Digital-Asset Treasuries
Japan Exchange Group (JPX) is exploring measures to limit crypto accumulation by listed companies. The Tokyo Stock Exchange operator is reviewing the enforcement of backdoor-listing rules and may require re-audits for firms that pivot heavily toward digital assets.
People familiar with the talks said three companies have already paused plans to buy Bitcoin following direct pushback from JPX. The exchange reportedly warned those firms that fundraising could be restricted if crypto accumulation remains a key business strategy.
JPX said it is closely “monitoring companies that raise concerns from a risk and governance perspective.” The group emphasized that protecting investors and preserving market integrity remain its priorities.
Japan currently has no specific rules preventing listed firms from holding cryptocurrencies. However, JPX’s latest stance signals growing caution after the rapid rise and fall of several crypto-heavy stocks this year.
Investor Losses and Market Volatility
Digital-asset treasury companies, or DATs, became a trend across Japan’s markets earlier in 2024. These firms adopted a strategy similar to Michael Saylor’s MicroStrategy, buying Bitcoin as part of their corporate balance sheets.
As the momentum faded, several DAT-linked stocks have plunged, erasing gains and inflicting losses on retail investors. MicroStrategy’s own shares have fallen by roughly half since mid-July, intensifying scrutiny of copycat firms in Asia.
Japan leads the region in listed crypto-buyers, with 14 companies currently holding Bitcoin, according to BitcoinTreasuries.net. But many of those stocks have been hit hard since June, prompting fears of contagion within the country’s retail trading community.
The exchange’s potential crackdown reflects growing unease about the speculative nature of crypto hoarding. Regulators fear that such practices could distort valuations and weaken investor protections in the country’s capital markets.
Related: Japan Targets Cryptocurrency Custodians in FSA Oversight Plan
Metaplanet and Convano Face Steep Declines
Tokyo-listed Metaplanet Inc. has become the most prominent example of this volatility. The company shifted from a hotel business to digital assets earlier this year and accumulated more than 30,000 Bitcoin. That made it the world’s fourth-largest public Bitcoin holder.
However, Metaplanet’s stock has tumbled more than 75% from its June peak after an earlier 420% rally. The sharp reversal has left many retail investors exposed, amplifying calls for oversight.
Another firm, Convano Inc., a nail salon operator aiming to buy 21,000 Bitcoin, has seen its shares drop around 60% since August. Analysts say these declines highlight the risks of relying too heavily on crypto strategies within traditional equity markets.
JPX is exploring extending its backdoor-listing ban to companies that transform into DATs after going public. The rule currently prevents private firms from bypassing normal listing procedures through mergers or acquisitions.
Across the Asia-Pacific region, exchanges in Hong Kong and other markets have resisted approving new DATs. Japan remains an exception, but recent developments suggest that may soon change. JPX has not yet confirmed a final decision, but sources say the focus is on curbing speculative behavior while maintaining fair access to digital innovation.
