Cold Feet in Beijing: Crypto Heavyweights Scrap $500M Treasury Plan

A high-profile attempt by some of the region’s most powerful founders to build an Asian rival to Strategy Inc. (formerly MicroStrategy) has been abruptly shelved, marking a significant retreat for institutional capital in the East.

The project, a Digital Asset Treasury (DAT) company aimed at hoarding Ether (ETH), was spearheaded by Huobi founder Leon Li Lin, HashKey Group Chairman Xiao Feng, and Meitu co-founder Mike Cai Wensheng.

According to sources close to the deal, the group has returned all capital commitments to investors and dissolved the initiative.

$110mn reality check

The collapse of the project highlights the widening gap between ambition and reality in the current market. While Bloomberg originally reported last month that the team had identified $1bn in potential backing, including interest from heavy hitters like HongShan Capital Group, the actual capital secured was far more modest.

Reports from the South China Morning Post confirm that the project had raised only $110mn in hard commitments before proponents pulled the plug.

The official reason for the reversal is "worsening crypto market conditions". With Bitcoin erasing its year-to-date gains to slip below $90,000 and Ether struggling to find momentum, the appetite for a leveraged, long-only treasury vehicle appears to have evaporated.

Failed strategy clone

The initiative was explicitly modelled on Strategy Inc., the US-based software firm turned Bitcoin vault that popularised the DAT model. The Chinese consortium intended to acquire a Nasdaq-listed shell company to house the assets, effectively creating a publicly traded proxy for Ether exposure that institutional investors could buy without touching the underlying crypto.

However, what works for Michael Saylor in the US is proving difficult to replicate in Asia. Leon Li Lin admitted to investors earlier this month that "the market wasn't doing very well" and the "macro outlook isn't very clear", signalling the group’s lack of conviction.

Smart money checks out

The shelving of this project is a bearish signal for the APAC region. These are not retail tourists; Li, Feng, and Cai are veterans who have navigated multiple market cycles. Their decision to return capital rather than deploy it suggests that the "smart money" in China sees further downside ahead, or at least lacks the confidence to catch the falling knife.

While Abu Dhabi is tripling down on its Bitcoin ETFs, the Chinese whales are taking their chips off the table.