The Tokyo Stock Exchange plans to strengthen regulation of companies holding Bitcoin

The Japan Exchange Group (JPX), the largest securities exchange operator in Japan, is considering implementing stricter scrutiny on listed companies that shift their core business towards large-scale cryptocurrency holdings, including new audit requirements and more rigorous assessments for reverse mergers. This move stems from the recent wave of losses at the Japan Digital Asset Trust (DAT) company.

Taking Metaplanet, which holds over 30,000 bitcoins, as an example, its stock price has plummeted 82% from a high of $15.35 in May to the current $2.66. Another DAT company, Convano, has also seen its stock price drop 61% from a high of $2.05 in August to $0.79. JPX's actions may fill regulatory gaps and restrict companies from circumventing traditional listing requirements through reverse mergers or transforming into cryptocurrency holding companies.