Hong Kong's top regulator flags digital asset treasury risks: report
Quick Take Hong Kong’s Securities and Futures Commission said it is concerned with digital asset treasury stocks trading at a high premium. The commission is monitoring how firms operate DATs and will explore whether relevant guidelines are necessary, according to local media reports. SFC Chair Kelvin Wong Tin-yau said the regulator will step up investor education efforts on DATs and their risks.
Hong Kong's securities watchdog is studying how listed companies operate digital asset treasuries (DAT) and exploring whether relevant guidelines are necessary, local media reported.
Kelvin Wong Tin-yau, the chairman of Hong Kong's Securities and Futures Commission, said in a Tuesday media briefing that the agency is closely monitoring how firms manage their digital asset treasuries, the South China Morning Post reported today.
"The SFC is concerned about whether DAT companies’ share prices are traded at a substantial premium above the cost of their DAT holdings," Wong reportedly said, citing U.S. cases where high premiums on DAT stocks exposed investors to unnecessary risks.
Wong added that retail investors may lack a full understanding of the risks associated with these companies. "We caution investors to fully understand the underlying risks of DAT," he said, adding that the SFC will step up investor education efforts on the topic.
Local newspaper Wenweipo, citing Wong, reported that Hong Kong currently has no specific regulations governing companies' digital asset treasury arrangements. Wong noted that the SFC will study whether it is necessary to establish guidelines on DATs.
While DATs gain momentum across the global crypto industry, Hong Kong has so far been against the establishment of local DATs. Bloomberg reported last week that the Hong Kong Stock Exchange has challenged plans from at least five companies seeking to make DATs their core businesses, citing rules that prohibit large liquid holdings.
The Block has reached out to the SFC for further comment.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
The AI boom may follow the path of the 19th-century railway bubble, and builders may not be the ultimate winners
Goldman Sachs analyst Bobby Molavi compared the current situation to the 19th-century British railway mania: 500 companies spent more than the nation's annual income building 8,000 miles of railway, with most early investors losing out, while the real beneficiaries were the later "passengers." He pointed out that the current AI craze is driven by both debt and momentum, and that the S&P 500’s forward P/E ratio of 18x is only "a bit cheaper." Whether the builders can retain value is uncertain, and history does not offer an optimistic answer.
If Anthropic's IPO goes smoothly and the stock price rises next week, then everything remains the same for AI. Otherwise, some companies will go bankrupt.
The shrinking valuations of two major giants have triggered a chain reaction—investors are adopting more conservative revenue multiples for AI startups and are directly halting high-valuation financing for companies with zero revenue. Multiple venture capital firms have advised their portfolio companies to lower valuation expectations and to quickly build up cash reserves. Market participants warn that the outcome of Anthropic’s IPO will be a barometer for the industry: if successful, the boom will continue; if it fails, some companies may face elimination.
After the Brazilian election, political discount deepens; Morgan Stanley remains bullish on Petrobras (PBR.US), focusing on fuel pricing and dividends
Morgan Stanley still maintains its most optimistic "Overweight" rating, but has lowered its year-end 2027 target price from $31 to $25.
Corning (GLW.US) receives initial "Buy" rating from Jefferies! AI factories driving a fiber optic rush, with a potential global supply gap of up to 30%
For Corning, the recent profit growth mainly comes from the expansion of AI clusters. As the number of optical links crossing cabinets and campuses increases, customers need to deploy more optical fibers within limited conduit and cabinet space, thus driving demand for high-density optical cables and connection systems.
Crypto prices
More
