In a recent exchange, Simon Gerovich, CEO of Metaplanet, addressed rising criticisms regarding the firm’s handling of shareholder funds and its transparency practices. The company, which holds significant Bitcoin assets, is currently grappling with over $1.2 billion in unrealized losses related to these holdings.
These developments are pivotal for shareholders, especially given the growing concerns surrounding the governance of publicly traded crypto companies. Allegations surfaced that Metaplanet had made its Bitcoin purchases at a market peak and subsequently remained silent during a major price downturn. In addition, critics raised questions about potential undisclosed borrowing against these Bitcoin assets, including a lack of clarity regarding interest rates and other borrowing counterparts.
In response to these criticisms, Gerovich emphasized that Metaplanet’s Bitcoin wallet addresses are transparently listed, and the company offers a live dashboard for shareholders to monitor its Bitcoin holdings in real-time. While acknowledging that the price at which Bitcoin was purchased in September represented a “local top,” Gerovich defended the firm’s long-term strategy, indicating that it does not focus on short-term market timing.
Despite the challenges presented by unrealized losses, the company did report impressive financial results, showing an operating profit of 6.2 billion yen, which reflects a staggering increase of 1,694% compared to the previous year. Gerovich clarified that the reported accounting losses stem exclusively from fluctuations in the market value of the company’s unsold Bitcoin holdings.
From a broader perspective, Metaplanet’s business model mirrors that of MicroStrategy, utilizing both equity and debt to accumulate Bitcoin as a cornerstone of its treasury strategy. However, as the crypto market continues to face pressure from traditional financial norms, corporate holders of Bitcoin like Metaplanet must navigate the complexities of meeting established disclosure standards, especially as unrealized losses become more prevalent in the sector.
This situation underscores a significant tension within the cryptocurrency industry: while the on-chain transparency of Bitcoin transactions is emphasized, it does not automatically align with the stringent disclosure mandates established by securities laws. As Metaplanet strives to address these issues, the firm remains under scrutiny from both investors and the broader market.
