Tokyo Exchange Targets BTC-Holding Firms Amid DAT Token Crash
The Japan platform Group (JPX), which operates the country’s largest stock market, is implementing new rules for publicly traded companies that switch their business model to purchaseing and holding cryptocurrencies.
The talks come at a time when several Digital Asset Treasury (DAT) companies, which have been in the news for building up large , are viewing their stock values drop sharply later than a surge in retail investor interest and a subsequent market crash.
Regulatory Change: JPX Looks at Tighter Scrutiny
People who know about JPX’s internal discussions say that the platform operator is considering stricter backdoor listing standards and more thorough audits for companies that are making a large move into accumulation.
Backdoor listings occur when a private company purchases a listed shell company to avoid the usual procedure of going public. JPX currently forbids this in its marketplaces.
If these rules were also applied to existing listed businesses that switch to holding cryptocurrencies, it would bridge a regulatory gap and make sure that these moves don’t avoid the severe disclosure and governance standards that public companies have to follow.
The rules could also sluggish down or stop the flow of new listings. This would hurt companies that want to rebrand or change their business strategy to focus on digital assets.
DAT Companies Under Stress
The restriction comes later than largest DAT companies lost a lot of money. Metaplanet, which owns more than 30,000 BTC, saw its share price drop from a year-to-date high of $15.35 on May 21 to just $2.66—an 82% drop.
Other DATs, like the nail salon franchise Convano, had the identical thing happen to them: their shares fell 61% from their highest levels, and they lost money on investments. The volatility of DAT stocks has made regulators pay more attention to them and brought attention to the risks that regular investors face in this market area.
Closing the Backdoor Listing Gap
JPX’s idea of expanding backdoor listing bans is considered a way to tighten listing requirements and close loopholes that companies are using to convert into crypto-holding vehicles. Currently, rules prevent private companies from entering public markets by acquiring shell companies.
However, listed companies can still transition to accumulating digital assets with the approval of their shareholders. JPX aims to enhance governance and transparency in the rapidly evolving DAT sector by focusing on this process.
Metaplanet Responds With Changes to Its Government
Following the release of the JPX investigation, Metaplanet CEO Simon Gerovich emphasized the company’s commitment to formal governance and the protection of shareholder rights.
Gerovich stated that JPX’s primary concerns are with companies accused of engaging in backdoor listings or transferring their business into digital assets without obtaining an explicit agreement from shareholders.
He said that this criticism does not apply to Metaplanet. In the last two years, Metaplanet has hosted five shareholder meetings, garnering votes for essential improvements, including modifications to its articles of incorporation and permission to expand the number of shares it can trade to purchase BTC.
Gerovich states that the company maintained its established management during the transition and adhered to the proper disclosure rules.
As the Japanese government works to protect investors, ensure the market is fair, and adhere to long-standing listing rules, the proposed regulatory revisions indicate that things are becoming tougher for organizations.
