Japan Exchange Group Considers Crypto Holding Rules

Japan Exchange Group, the operator of the Tokyo Stock Exchange, is considering stricter regulations for publicly listed companies that accumulate large cryptocurrency holdings as part of their treasury strategies. The potential measures, aimed at addressing governance and investor protection concerns, come amid sharp declines in shares of several such firms, including a more than 75 percent drop in Metaplanet Inc.'s stock since June 2024.

The exchange's deliberations focus on companies pivoting their core business toward digital asset treasury practices, where firms hold substantial reserves of cryptocurrencies like Bitcoin. Sources familiar with the discussions indicate that Japan Exchange Group may expand its prohibitions on backdoor listings, which involve private companies going public through mergers with listed shells rather than traditional initial public offerings. Currently banned, these rules could be applied more rigorously to prevent listed companies from shifting abruptly to crypto-focused models without adequate scrutiny. Additionally, the exchange is exploring requirements for fresh audits of firms beginning large-scale crypto accumulations to evaluate risks and...