Hong Kong SFC Tightens Watch on Digital Asset Treasuries

The Hong Kong Securities and Futures Commission (SFC) has tightened listing rules for firms leaning towards digital asset treasuries (DAT). The regulator aims to establish clear guidelines to ensure financial stability and investor protection. 

According to SFC, the initiative addresses a regulatory gap, as current rules do not specifically cover how firms manage digital assets. The proposed framework is expected to enhance transparency, mitigate risks, and support Hong Kong’s position as a global crypto hub.

The term “Digital asset treasury (DAT)” emerged in August 2020, when MicroStrategy’s CEO (now Strategy), Michael Saylor, announced in a Securities and Exchange Commission filing that the company had purchased Bitcoin (BTC) as part of its

new capital allocation strategy.

By September 2025, around 178 publicly traded companies together hold roughly 989,926 Bitcoin, worth about $107 billion, with Michael Saylor’s firm leading the pack.

As firms look to accumulate large amounts of crypto for their treasuries, some question whether this signals genuine institutional maturity. This question, among others, sparked interest among regulators, including the Hong Kong Securities and Futures Commission (SFC).

Hong Kong Proposes Tighter Rules For Digital Asset Exchanges

During a media briefing on Tuesday, October 28, 2025, SFC Chairperson Kelvin Wong Tin-yau stated that the SFC will track how listed DAT firms are using crypto assets to manage excess cash or pivot toward cryptocurrencies as a major business.

The SFC chairman mentioned that Hong Kong currently lacks legislation regulating listed firms’ participation in digital asset treasury arrangements. He added that Hong Kong retail investors may not fully understand the risks tied to DAT strategies.

Wong warned that some DAT firms may trade at steep premiums to their crypto holdings, posing risks for investors.

According to Wong,

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 move to step up oversight came a few days after the Hong Kong Stock Exchange (HKEX) reportedly challenged plans by about 5 firms to shift to core DAT-focused business models. The HKEX reportedly questioned the compliance of these firms with regulations prohibiting large liquid holdings.

Also, the HKEX reiterated that all DAT listing applicants must operate “viable and sustainable” businesses. Any firm aiming to pivot into DAT must integrate cryptocurrency as a core business. However, the regulations prohibit excessive holdings of liquid assets.

Wong Warns Retail Investors About The Risks Involved

Regarding listed firms claiming to adopt DAT, Wong urged investors to fully understand what DAT is and its underlying risks. 

He also indicated that the SFC will carefully study the issue of listed companies purchasing Bitcoin. He said, 

The SFC is closely monitoring DAT developments.

According to Wong, the SFC will improve public awareness and educate investors on DAT. He is reportedly preparing a public awareness program already to warn retail investors about these risks.

Digital Asset Treasuries (DAT) Firms Can Distort Equity Valuations

Most firms seeking to become DAT firms took their lead from US-listed firms that held large amounts of Bitcoin. At times, these US-listed firms traded at steep premiums to the value of the Bitcoin they held, often leading to boom-and-bust cycles for stakeholders.

Industry experts have warned that leaning towards digital asset treasuries is simple, straightforward, and effective as an alternative store of value. However, exposure to large amounts of crypto can blur disclosures, overstate market capitalization during rallies, or amplify drawdowns during downtrends.

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