JPX Weighs Crackdown on Crypto Treasury Firms

Japan’s largest stock market operator is weighing new restrictions on publicly traded companies that pivot their core business into buying and holding crypto, signaling a potential shift in one of the most active markets for digital asset treasury (DAT) companies.

Citing anonymous sources familiar with the internal deliberations, Bloomberg reported that Japan Exchange Group (JPX) is exploring stricter scrutiny for companies that change their core business to large-scale crypto accumulation. This includes adding new audit requirements and applying backdoor listing rules to such companies.

The move comes after a wave of losses hit Japan’s DATs, many of which attracted retail investors earlier this year. Metaplanet, Japan’s largest DAT, holding more than 30,000 Bitcoin (BTC), saw his actions fall one year to date (YTD) high of $15.35 on May 21 to $2.66 at the time of writing. This marked an 82% drop from its highest value this year.

Convano, Japanese nail salon franchise, which saw a breakout performance in Augustit now trades at about $0.79 per share, a 61% drop from its high of $2.05 on August 21. BitcoinTreasures.NET data demonstrated that company is down almost 11% on its BTC investment.

The backdoor listing rules would fill a regulatory gap

Applying the backdoor listing rules to companies pivoting into cryptocurrencies would mark a significant tightening of Japan’s listing standards.

Backdoor listings occur when a private company acquires an already listed shell company to bypass the traditional initial public offering (IPO) route, and JPX already prohibits such maneuvers.

Extending the ban to listed companies switching to crypto-holding vehicles would close a regulatory loophole that some DATs could exploit to evolve their business models.

If JPX formally restricts such pivots, it could slow or halt the listing pipeline for new DATs.

Related: Strategy’s Bitcoin dominance slips in October as corporate treasurers expand

Metaplanet chief highlights governance steps in response to JPX report

Metaplanet CEO Simon Gerovich pushed back against the implication that companies hoarding Bitcoin could be skirting governance or disclosure rules.

In the X post, Gerovich answered to the report, saying that JPX’s concerns are directed at companies suspected of making backdoor listings or pivoting into digital assets without shareholder approval. He said this does not apply to Metaplanet.

“In contrast, at Metaplanet we have held five shareholder meetings over the past two years (four extraordinary general meetings and one annual meeting), securing shareholder approval for all critical issues.”

He added that they also amended the articles of incorporation of the company and increased the authorized shares to finance BTC purchases. He said the company has adhered to formal governance processes under the same management team that had led the company before the pivot.