India’s SEBI Chairman prohibits crypto-based non-public offerings due to a lack of regulatory clarity
Ajay Tyagi, Chairman Of The Securities And Exchange Board Of India (SEBI), Recently Addressed A News Conference In Which He Prohibited Domestic Mutual Funds From Investing In Cryptocurrency. According To Local Media Accounts, He Requested That The Funds Wait For Government Legislation Before Investing.
This effectively means that mutual funds will be unable to introduce new fund offerings (NFOs) based on digital assets. Meanwhile, stakeholders and regulators are awaiting the establishment of a crypto-framework, while other participants have chosen a wait-and-see stance. Invesco Mutual Fund recently revealed that its planned Invesco CoinShares Global Blockchain ETF Fund will be delayed. On 24 November, it was slated to open for subscription in India.
While the fund’s exposure was favourable to blockchain startups, despite the SEBI’s clearance, it chose to wait for clarification in the ecosystem.
It is worth noting here that there are now no regulatory barriers preventing Indians from investing in and trading crypto-assets. However, the SEBI chairman’s statements are critical, since the regulator is required to supervise the crypto-sector. Indeed, as previously reported, SEBI would likely regulate cryptocurrency legislation and the operations of cryptocurrency platforms.
Having said that, there is speculation that the government may consider the expected crypto-bill during the forthcoming Budget Session in early 2019. Now that the bill has been withdrawn from the Parliament’s schedule, media sources indicate that the business may also anticipate a separate law regulating cryptocurrency next year.
Meanwhile, India’s central bank has maintained a tough position, even urging the government that private cryptos be completely banned. However, a council of legal experts has concluded that it is now “too late.” Indeed, publications cite them as advocating for a more balanced regulatory approach.
According to L Badri Narayanan, Executive Partner at Lakshmikumaran & Sridharan Attorneys, “The government considers cryptocurrencies to be investment vehicles and intends to regulate them.” Cryptocurrencies are likely to be recognised as assets and subject to capital gains tax under current income tax regulations. GST and TDS are two other situations where the legislation is unclear.”
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