For a brief moment, the digital asset treasury (DAT) was Wall Street’s bright, shiny object.

But in 2026, the novelty has worn off.

The star of the “passive accumulator” has dimmed, and rightly so. Investors have realized that simply announcing a bitcoin purchase is no longer a magic trick that guarantees stock appreciation. The easy money trade is over.

But this cooling-off period is not a death knell; it is a reckoning. It is stripping away the hype to reveal a stark reality: Dozens of public operating companies are attempting to transform themselves into unregulated hedge funds—often without the risk architecture of a fund or the governance standards of a public company.

The playbook was alarmingly simple: raise capital, accumulate cryptocurrency, and pray for appreciation.

But as a securities attorney and CEO who has overseen more than $5 billion in capital raises, including as the General Counsel to MARA Holdings during its run to a $6 billion valuation, I know that accumulation is not a sound business strategy. It’s a crapshoot. And as we approach annual reporting deadlines, the bill for those bets is coming due.

If the DAT sector is to mature from a speculative frenzy and gain credibility as a respected fintech strategy, we must stop treating governance as an afterthought. It must be the foundation.

The risk of the “blind buy”

The prevailing DAT model has been defined by a singular mandate: raise cash, buy assets, hold. While this works in a bull market, it exposes shareholders to catastrophic downside in a bear market or during times of volatility, as we’ve all seen recently.

Without a clear, articulated strategy for why a specific asset is being chosen or how liquidity will be managed, these companies are essentially gambling with shareholder value. Both retail and institutional investors are beginning to ask harder questions. They are no longer satisfied with“we believe in crypto.” They want to know: How are you balancing capital allocation? What are the specific risks of the protocol you are invested in, and what are you doing in terms of risk mitigation? If the current strategy stalls, do you have a plan B?

A fair number of periodic reports filed by DATs today appear to offer generic boilerplate risk factors. They tend to reiterate warnings about volatility and hacking, but fail to address the idiosyncratic risks of their specific treasury assets. This is where the new generation of DATs will need to distinguish themselves to survive and be competitive.

Using the annual report as a storytelling tool

As reporting deadlines loom, management and counsel at DATs need to revamp their filings. For instance, the Risk Factor section of a 10-K should not be a regurgitation of every risk factor that has appeared on EDGAR, the SEC’s primary digital database; it should be a thoughtful assessment of realistic short- and long-term risks, specifically addressing the issuer's business at hand.

A mature DAT must move beyond the basics and explain the trade-offs transparently. Investors deserve to know why a dollar is going into AVAX (or BTC) versus R&D or marketing, and exactly how the company generates solid revenue streams outside of asset appreciation to keep the lights on during a crypto winter. Furthermore, companies must disclose the specific protection mechanisms and controls they have in place to prevent the treasury from becoming a single point of failure.

The “governance alpha”

The next wave of successful DATs will be defined by their governance architectures. This isn’t just about regulatory compliance; it is about shareholder trust and the fulfillment of fiduciary duty.

We recently navigated this at AVAX One. We recognized the insufficiency of simply announcing a pivot to a DAT model, which meant going to our shareholders—the true owners of the capital—and asking for explicit approval for our digital asset strategy.

The result was telling. Over 96% of voting shareholders approved the move. This was not just a vote for another crypto treasury. It was a vote mandating a governance strategy for crypto.

It gave us a license to operate that “blind buy” DATs simply do not have, and we intend to use that mandate to support fintech through utilizing the Avalanche ecosystem.

The regulatory shield

Finally, we cannot ignore the SEC and the broader regulatory landscape. While many in the industry view regulation as a hindrance, for a public DAT, it is a necessary and welcome shield.

SEC disclosure obligations force a level of transparency that protects shareholders from the worst excesses of the crypto market. It is a strong tool that enables public DATs to distinguish themselves from opaque private entities.

By embracing these obligations rather than doing the bare minimum to scrape by, we build a moat of credibility and provide verifiable behavior and safety assurance.

We are entering a new phase. The “wild west” days of treasury management are ending. The market will soon punish those who are merely collecting coins and reward those who are building durable, governed financial fortresses.

Your annual report is your final term paper, and market reaction is your report card. Make sure you’ve done your homework.