Strategy CEO Phong Le has argued that MSCI's proposed exclusion of companies holding more than 50% of their crypto on their balance sheets is comparable to excluding multinational energy companies like Chevron for holding oil.
MSCI announced in October that it was consulting with the investment community regarding the potential exclusion of Bitcoin and other digital asset treasury companies (DATs) that hold the majority of their balance sheet in cryptocurrencies.
During an interview with Schwab Network on Wednesday, Le stated that while he has "a lot of respect for the indexes," he believes MSCI's stance is "misinformed and misguided."
He drew parallels to other established companies, noting that oil giant Chevron holds more than half of its assets in oil, timberland company Weyerhaeuser has a significant portion of its assets in wood, and Simon Property Group owns a substantial part of its assets in real estate, none of which face exclusion from indices.
Phong Le joined @SchwabNetwork to discuss the $60T digital credit opportunity and response to MSCI. Restricting passive index investment in bitcoin today would be like restricting investment in oil and oil rigs in the 1900s, spectrum and cell towers in the 1980s, or compute and…
"It seems very early to pick winners and choosers and stifle innovation in a category like this," Le commented.
This would be like in the 1980s, saying the telecom company shouldn’t have built out cell towers and spectrum, or three years ago, saying AI companies shouldn’t be investing in LL labs and high-performance compute.
MSCI’s Stance is a Mischaracterization: Strategy CEO
Le further stated that other aspects of MSCI's proposal, such as characterizing Strategy and other digital asset companies as funds rather than operating companies, are also mistaken.
Feedback received on the proposal indicates that DATs can "exhibit characteristics similar to investment funds, which are currently not eligible for index inclusion," according to MSCI.
"I’ve been CFO since 2015, Michael Saylor founded the company in 1989, we’ve been public since 1998, I work here day to day, and we are 100% an operating company legally from a corporate structure," Le asserted.
Strategy Letter Says MSCI Proposal Isn’t Neutral
Le's remarks coincide with Strategy's release of its letter to MSCI, pushing back against the proposal. The company argues that it would bias MSCI against crypto as an asset class, rather than the index company acting as a neutral arbiter.
Strategy's Bitcoin treasury recently swelled past 660,000 BTC following a fresh $962 million buy.
The MSCI consultation period is set to conclude on December 31, with the final decision expected to be made public on January 15 of the following year. Any implemented changes would come into effect in February.
Charlie Sherry, head of finance at Australian crypto exchange BTC Markets, told Cointelegraph last month that MSCI typically initiates consultations for changes only when they are already leaning towards implementation.