Ethereum DAT ambitions of Chinese crypto heavyweights collapse amid gloomy market signals

A massive Ether treasury project led by China’s crypto elites amid a market crisis.

China’s prominent crypto figures have quietly abandoned a high-profile attempt to establish a $500 million Ethereum Digital Asset Treasury (DAT) company, halting the initiative after months of planning amid a deepening slump in global crypto markets.

The project, which was led 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, aimed 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 suspended

Despite securing $110 million in capital commitments, the group decided to suspend the plan after market conditions deteriorated, according to the latest report from South China Morning Post. DAT companies have soared in popularity in the United States, where rising crypto prices have fueled investor interest over the past year. The most prominent example is Nasdaq-listed Strategy, which owns nearly 650,000 bitcoin.

But Hong Kong regulators have not embraced the DAT model.

The development comes as Bitcoin has suffered a steep six-week decline after hitting an all-time high of $126,272.76 on October 6. It even briefly fell below $90,000. Ethereum has also been on a similar trajectory as it trades below $3,000 at the time of writing.

It was against this backdrop that Li gave a blunt assessment of the current circumstances. Li, who sold Huobi in 2022 and is now chairman of Hong Kong-listed Sinohope Technology Holdings, a crypto asset management firm formerly associated with Huobi, told investors at an event in Hong Kong this month that “the market was not doing very well” and that the broader “macro outlook is also not very clear.”

According to a video recording of the same event, the project’s backers had already chosen to postpone the DAT effort to avoid potential losses to investors; Investors reportedly included HongShan Capital Group and Yunfeng Financial Group.

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During the event, Meitu’s Cai indicated that the group may revisit the plan once conditions improve. According to a Bloomberg report last month, the group planned to acquire a Nasdaq-listed shell company to launch the ether DAT vehicle, but that strategy is now on hold while the founders wait for market sentiment to stabilize.

DAT’s under pressure

In the United States, several companies have aggressively moved to Ethereum. For example, BitMine transitioned from its original role as a Bitcoin mining company to becoming the world’s largest corporate holder of ETH earlier this year.

The company is now chaired by Wall Street veteran and Fundstrat co-founder Tom Lee, who recently stated that Ethereum is entering its own “super cycle,” similar to Bitcoin’s explosive growth trajectory over the past eight years. However, current market conditions continue to put pressure on digital asset-focused stocks, including Bitmine. In the past month alone, the BMNR fell by more than 45%.