Hong Kong Regulator Sounds Alarm on Companies Holding Crypto In Treasuries

Hong Kong’s SFC has raised concerns about the rise of digital asset treasuries, companies that put crypto on their balance ￰0￱ Kong SFC Is Closely Monitoring Crypto Treasury Developments As reported by the South China Morning Post, Hong Kong’s Securities and Futures Commission (SFC) is keeping an eye on how firms are using crypto as part of their treasury ￰1￱ term Digital Asset Treasury (DAT) refers to a public company that acquires and holds Bitcoin or other cryptocurrencies to give stockholders exposure to price movements. Often, the stock price of such firms trades at a premium compared to their treasury reserves, and this seems to be where the SFC’s concern ￰2￱ Wong Tin-yau, the regulator’s chairman, noted, “The SFC is concerned about whether DAT companies’ share prices are traded at a substantial premium above the cost of their DAT holdings.” Wong’s statement comes a week after Bloomberg reported that the Hong Kong Stock Exchange and Clearing (HKEX) blocked a DAT strategy pivot for at least five firms in recent ￰3￱ operates the city’s main stock exchange, one of the largest markets in the ￰4￱ bourse operator, which names the Hong Kong Government as its largest shareholder, challenged the plans of these companies, raising compliance issues with rules that prohibit large liquid ￰5￱ revealed that the SFC is closely monitoring DATs and plans to strengthen public awareness about the associated risks.

“We caution investors to fully understand the underlying risks of DAT,” said the SFC ￰6￱ DAT strategy was popularized by Michael Saylor’s Strategy (formerly MicroStrategy), which adopted a Bitcoin treasury as its core business back in ￰7￱ company’s reserves have since grown to 640,808 BTC, worth a whopping $70.6 ￰8￱ firm paid about $47.4 billion in total to assemble its BTC treasury, so at the current price of the crypto, it’s sitting at a healthy profit of almost 49%. Strategy’s success has unleashed a DAT wave, as other companies rush to replicate the ￰9￱ isn’t the only asset that corporates are looking at today; there has also been a rise in DATs focused on Ethereum and ￰10￱ owns the largest ETH treasury in the world, containing about 3.34 million tokens, equivalent to $13 ￰11￱ Forward Industries is the king of SOL DATs with 6,822 coins or $1.3 billion in ￰12￱ represent just one route that traders can take for gaining indirect exposure to digital ￰13￱ path is through the spot exchange-traded funds (ETFs) , investment vehicles that trade on traditional exchanges and buy the underlying crypto on behalf of ￰14￱ for spot ETFs appears to be weak right now, however, as according to data from on-chain analytics firm CryptoQuant , the 7-day change in the netflow of the US Bitcoin funds has dropped to a negative value of 281 BTC, which is the lowest since ￰15￱ Price At the time of writing, Bitcoin is trading around $110,000, down around 2.7% over the last 24 hours.