Bitcoin News Today: Japan Balances Crypto Innovation with Investor Safeguards as DATs Plummet

Japan Exchange Group (JPX) is under pressure to rein in the rapid expansion of digital-asset treasury (DAT) companies, as volatile share prices and investor losses fuel regulatory scrutiny. The Tokyo Stock Exchange operator is reportedly considering stricter enforcement of backdoor listing rules and mandatory audits for firms pivoting to large-scale crypto accumulation, according to sources familiar with the discussions. These measures aim to address risks linked to the recent collapse in DAT stocks, with Metaplanet Inc.-Japan's largest DAT-sinking over 75% from its mid-June peak.

The proposed rules would extend existing prohibitions on backdoor listings, which allow private companies to bypass traditional IPOs by acquiring listed shells, to firms shifting their core operations to crypto. Three listed companies have already paused plans to buy cryptocurrencies since September, citing concerns that such strategies could limit their fundraising capabilities. JPX has no blanket ban on crypto accumulation but has stated it is "monitoring companies that raise concerns from a risk and governance perspective"according to the Bloomberg report.

The regulatory pushback comes as Japan's DAT sector faces a reckoning. Metaplanet, which transitioned from hotels to Bitcoin in 2024, now holds 30,000 BTC but has seen its shares plummet 82% year-to-date. Similarly, nail salon franchiser Convano Inc., aiming to amass 21,000 BTC, has lost 61% of its value since an August peak. These declines mirror a global trend, with Strategy Inc.-a U.S. firm modeled after DATs-experiencing a 50% drop in shares since mid-Julyaccording to Bloomberg reports.

JPX's proposed measures align with broader regional caution. While Japan hosts 14 public Bitcoin buyers-the most in Asia-Hong Kong and other Asia-Pacific exchanges have resisted new DAT listingsaccording to Bloomberg. The Tokyo-based exchange's focus on audits and governance reflects concerns over transparency, particularly after companies like Metaplanet leveraged shareholder approvals to pivot to crypto without disclosing long-term risksaccording to Coinotag.

Industry experts warn that without stricter oversight, DATs could exacerbate market instability. "The DAT model relies on volatile assets with little revenue streams," said one analyst, adding that retail investors are particularly vulnerable to sharp corrections. Metaplanet CEO Simon Gerovich has defended the firm's governance practices, noting five shareholder meetings in two years to approve Bitcoin strategiesaccording to Cointelegraph.

The regulatory debate underscores Japan's balancing act between fostering innovation and protecting investors. While DATs initially drew enthusiasm for their potential to hedge against yen weakness, the sector's collapse has exposed gaps in oversight. JPX's deliberations could reshape Japan's role as a hub for corporate crypto adoption, with implications for global markets. As the exchange weighs its next steps, firms like Metaplanet face an uncertain path forward, navigating both market volatility and tightening rulesaccording to Coinotag.