Hong Kong is tightening its control over cryptocurrency investments by listed companies. The Securities and Futures Commission (SFC) has begun rejecting applications from companies that wish to invest large parts of their balance sheet in Bitcoin or other tokens. At least five of these applications have already been rejected as part of an effort to reduce liquidity risks and unchecked speculation.
The ban affects listed issuers, corporate treasurers and any entity that sells to the public. According to the SFC, there is no clear regulatory framework for “digital asset treasuries” (DATs), which are companies that swap cash, bonds or other liquid assets for cryptocurrencies. The main concern is that buyers often pay far more than the coins are worth and have no way of knowing the underlying assets.
To close this regulatory gap, the SFC has ordered licensed trading platforms to keep the majority of coins in cold wallets (“cold wallets”) and monitor transfers in real time. These measures follow the regulator’s “A-S-P-I-Re” timetable and complement the rules for virtual asset service providers (VASPs) that have been mandatory since June 2023, while stablecoin operators will be required to be licensed from August 2025.
Market impact and industry adaptation
Despite the restrictions, large professional funds continue to raise fresh capital for cryptocurrency investments. HashKey plans a $500 million Digital Treasury fund that will hold only Bitcoin or Ether, while Sora Ventures has secured $200 million to launch a similar fund with a target of reaching $1 billion. This shows that large investors are still seeking exposure to crypto assets, although they must now use standalone funds instead of placing coins on the parent company’s books.
Listed companies must now rewrite their treasury rules: keep cash in bank accounts or regulated instruments, disclose any small positions in cryptocurrencies and demonstrate that they can meet short-term debts. As a result, derivatives desks that trade perpetual swaps face sharper price swings each time the SFC announces another rejected application.
The public warning campaign will begin immediately, while the next fixed date on the regulatory calendar is August 1, 2025, when all stablecoin issuers must be licensed to operate in Hong Kong.
