Hong Kong Stops Public Firms from Adopting Digital Asset Treasury Models

Highlights:

• The Hong Kong Stock Exchange blocked several firms from shifting into digital asset treasury models.
• Regulators warned that DAT companies’ inflated stock prices may expose investors to major risks.
• Authorities stressed investor education, as many still don’t understand DAT and crypto-related activities.

Digital assets have grown fast and are becoming a popular investment option. Several listed companies plan to use their funds to buy these assets and even become Digital Asset Treasuries (DATs). Reports say the Hong Kong Stock Exchange has questioned plans from at least five companies, and none have received approval to list. Hong Kong currently does not allow listed companies to turn into firms that only hold cryptocurrencies.

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Chairman of the Securities and Futures Commission (SFC) Kelvin Wong Tin-yau said Hong Kong still lacks laws for DAT activities. He stated that authorities are watching the market and will issue guidance if needed to protect investors.

Hong Kong has stated that it has raised objections to the digital asset treasury (DAT) transformation plans of at least five companies, none of which have received listing approval. Hong Kong currently prohibits listed companies from transforming into pure cryptocurrency…

— Wu Blockchain (@WuBlockchain) October 30, 2025

SFC Warns on Investor Awareness for Digital Asset Treasury

Wong said the SFC is concerned that DAT companies’ share prices may trade far above the actual value of their digital asset holdings. He pointed to U.S. cases where such high premiums exposed investors to unnecessary risks. He added that many retail investors may not fully understand the risks linked to these companies. Wong noted that the SFC advises investors to be cautious and will strengthen its efforts to educate the public about DAT-related risks.

Wong Tin-yau said some listed companies want to take part in these activities, so close work between the SFC and the Hong Kong Stock Exchange is important. He advised investors to be careful and learn what DAT means and how it works if any listed firms plan to adopt it.

He stated:

“After education, investors will be able to discern that these companies, after engaging in DAT, have a significant premium in their share price and market capitalization. If these activities are formally regulated one day, this premium could disappear ‘within a day.'”

Wong further questioned the limits on crypto holdings for listed companies, asking whether owning one Bitcoin, ten, or even a hundred would be acceptable. He said if a company changes all its cash into Bitcoin, it’s hard to say if that’s right, just because Bitcoin is easy to use or sell. “It’s probably impossible to list in Hong Kong in the form of DAT right now. Before new regulations are introduced, it’s difficult to define the ‘red line’ for listed companies investing in cryptocurrencies,” he added.

10X Research estimated that retail investors lost around $17 billion trading DAT firms. Many shareholders reportedly overpaid for crypto exposure through high-priced company shares. The losses came as shares traded far above the firm’s actual net asset value.

Stablecoin Concerns Add Pressure

Hong Kong’s strict attitude toward DATs comes as the city tries to build a clear crypto framework. In August, new laws were passed allowing licensed companies to issue stablecoins backed by currencies like the US dollar.

Economists say the government’s approach remains too cautious, especially compared to the United States. Reports show Beijing has recently asked several Chinese firms, including Ant Group and JD.com, to stop work on stablecoin projects. Both firms were previously preparing to apply for Hong Kong’s first stablecoin licenses, but have now paused.

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