Crypto recap: Strategy vs MSCI, Japan shifts law, XXI drops 20%
Here are the key developments in crypto markets and policy: Strategy submitted feedback to MSCI opposing a plan to exclude companies with large crypto treasuries from index eligibility; Japan outlined a shift to regulate crypto under securities law; and Bitcoin-focused Twenty One Capital fell 20% on its first trading day.
Strategy challenges MSCI proposal on crypto-treasury firms
Strategy, described as the largest corporate holder of Bitcoin, filed comments with MSCI on Wednesday regarding a proposed change that would remove from index consideration companies whose balance sheets consist of 50% or more in digital assets.
In its letter, the company argued that digital asset treasury companies are operating businesses capable of adjusting their strategies, citing its own Bitcoin-backed credit instruments as an example. Strategy said the change would introduce bias against crypto as an asset class instead of maintaining neutrality in index construction.
The company noted MSCI does not exclude other firms concentrated in a single asset class, such as real estate investment trusts (REITs), oil producers, or media portfolios. The letter added that many financial institutions primarily hold specific asset types and package and sell derivatives backed by those holdings, such as residential mortgage-backed securities.
The submission also stated that implementing the policy “undermines” US President Donald Trump’s objective of positioning the United States as a global leader in crypto. Critics, however, contend that including crypto treasury companies in global indexes could introduce additional risks.
Japan to shift crypto oversight from payments to securities framework
Japan’s Financial Services Agency (FSA) on Wednesday released a comprehensive report from the Financial System Council’s Working Group addressing the regulatory status of crypto assets across multiple sectors.
The report outlines a plan to move the legal basis for crypto regulation from the Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA), the country’s primary securities law covering issuance, trading, and disclosures. The FSA said crypto assets are increasingly used as investment products domestically and internationally, underscoring the need for investor protections consistent with financial products.
Bringing crypto under FIEA would tighten disclosure standards for initial exchange offerings (IEOs), or token sales conducted via exchanges. The document noted that user crypto transactions resemble securities trades and can involve the sale of new tokens or the trading of existing ones, highlighting the need for timely information during IEOs.
Twenty One Capital falls 20% on debut after SPAC merger
Shares of Twenty One Capital (XXI), a US-based crypto treasury company, declined 20% on its first day of trading following its merger with blank-check firm Cantor Equity Partners.
The stock opened on Tuesday at $10.74, below Cantor’s special purpose acquisition company closing price of $14.27 on Monday prior to the merger.
Twenty One Capital closed Wednesday at $11.42, down 19.97% over 24 hours. The company’s public listing was among the more closely watched crypto debuts this year and is backed by stablecoin issuer Tether, crypto exchange Bitfinex and Japan’s SoftBank Group. Jack Mallers, founder and CEO of the Bitcoin payments platform Strike, was named CEO of Twenty One.
The firm holds over 43,500 Bitcoin valued at more than $4 billion, ranking third among public companies by Bitcoin holdings, behind Bitcoin miner MARA Holdings, according to BitcoinTreasuries.NET.
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