China’s prominent crypto figures have quietly shelved a high-profile effort to create a $500 million Ethereum Digital Asset Treasury (DAT) firm, halting the initiative after months of planning amid a deepening slump across global crypto markets.
The project, which was spearheaded earlier this year by Huobi founder Leon Li Lin, HashKey Group chairman and CEO Xiao Feng, Meitu co-founder Mike Cai Wensheng, and Fenbushi Capital founder Bo Shen, had set out to raise half a billion dollars to build a DAT company dedicated to investing in ether, the world’s second-largest cryptocurrency.
High-Profile Ether Plan Shelved
Despite securing $110 million in capital commitments, the group decided to suspend the plan after market conditions worsened, according to the latest report by South China Morning Post. DAT firms have surged in popularity in the United States, where rising crypto prices over the past year have helped fuel investor interest. The most prominent example is Nasdaq-listed Strategy, which holds nearly 650,000 bitcoin.
However, regulators in Hong Kong have not embraced the DAT model.
The development comes as Bitcoin has suffered through a steep six-week decline after reaching an all-time high of $126,272.76 on October 6. It even briefly plunged below $90,000. Ethereum also navigated a similar trajectory as it trades under $3,000 at the time of writing.
It was against this backdrop that Li offered a blunt assessment of current conditions. Li, who sold Huobi in 2022 and now chairs Hong Kong-listed Sinohope Technology Holdings, a crypto wealth-management firm previously linked to Huobi, told investors at an event in Hong Kong this month that “the market wasn’t doing very well” and that the broader “macro outlook isn’t very clear either.”
According to a video recording of the same event, the project’s backers had already opted to delay the DAT effort to avoid potential investor losses; investors reportedly included HongShan Capital Group and Yunfeng Financial Group.
At the event, Meitu’s Cai indicated that the group may revisit the plan once conditions improve. The group had intended to acquire a Nasdaq-listed shell company to launch the ether DAT vehicle, according to a Bloomberg report last month, but that strategy is now on hold as the founders wait for market sentiment to stabilize.
DATs Under Pressure
In the United States, several firms have moved aggressively into Ethereum. BitMine, for one, pivoted earlier this year from its original role as a Bitcoin mining company to becoming the world’s largest corporate holder of ETH.
The company is now chaired by Wall Street veteran and Fundstrat co-founder Tom Lee, who recently stated that Ethereum is beginning its own “supercycle,” similar to Bitcoin’s explosive growth trajectory over the last eight years. However, the current market conditions continue to pressure digital asset-focused stocks, including Bitmine’s. In fact, BMNR sank over 45% in the past month alone.