Hong Kong Hits the Breaks on Crypto Treasury Firms—Premium Could Disappear ‘In a Day’ Warns Regulator

Core Insights - Hong Kong authorities are resisting the global trend of digital asset treasury (DAT) strategies, with the Hong Kong Stock Exchange (HKEX) challenging firms attempting to adopt such strategies [1][3][6] Regulatory Concerns - The Securities and Futures Commission (SFC) Chairman Wong Tin-yau has raised concerns about the share price premium associated with DAT companies, indicating that many are overvalued compared to their underlying assets [2][6] - HKEX has pushed back against at least five firms pursuing DAT strategies, emphasizing that companies must maintain a "sufficient level of operations" to justify their listing under Rule 13.24 [3][4] Operational Guidelines - HKEX's interpretation of Rule 13.24 suggests that companies holding significant assets without adequate operations may not comply with listing requirements, although the definition of "sufficient" remains qualitative and lacks clear guidance [4] - While some companies, like Boyaa International, have accumulated Bitcoin without issues, pure-play DAT strategies are currently not permitted [5] Market Valuation Insights - The premium associated with DAT companies is often expressed through the market capitalization to net asset value (mNAV) ratio, with Strategy's mNAV currently at 1.33, indicating a 33% premium on its Bitcoin holdings [7]