The heightened scrutiny arises from a decline in digital-asset treasury (DAT) activity. Firms that have adopted the model, where they own substantial reserves of Bitcoin or , have experienced a decline in their share prices in line with the recent downturn in the crypto market. The reached a record high of $126,251 earlier this month, but soon fell to $109,000, and the valuation in the cryptocurrency sector is lower.
Regulators in Hong Kong classify companies that primarily hold cash or other assets, including cryptocurrencies, as “cash companies.” These firms can face suspension or have their listings rejected unless they indicate that digital assets are part of their core business operations. According to legal experts, this regulation works to prevent listed companies in the region from becoming pure crypto-holding vehicles.
