The head of SEBI is asking Indian investment funds to avoid investing in crypto offers

Chairman of the Securities and Exchange Committee of India, Ajay Tyagi, he stated that domestic investment funds should refrain from investing in any cryptocurrency-related offerings.

Tyagi further stated that unless the government has introduced a regulatory law clarifying the current state of cryptocurrency-related activities in India, mutual funds cannot invest such investments in cryptocurrencies.

The Indian market regulator is stopping cryptogram-based NFOs

Speaking at a press conference, SEBI chief Ajay Tyagi further said that domestic investment funds should refrain from introducing new fund offers (NFOs) related to cryptocurrencies until the government publishes appropriate laws to regulate cryptocurrency activities in India.

Tyagi’s comments came after a case involving an asset management company called Invesco Mutual Fund. Despite SEBI’s approval, the company’s blockchain fund has been delayed due to legal concerns.

Tyagi’s statement on mutual funds implies that SEBI will not approve any blockchain or crypto fund until the government passes a standardized crypto-law that effectively regulates crypto activities in India.

Indian crypto crisis

Initially, the Indian authorities planned to introduce a law on crypto regulation that intended to tax crypto assets and allow them to trade in a regulated ecosystem. The bill was supposed to be presented in Parliament this winter, but was postponed quoting The government’s need to conduct “broader consultations” before bringing it into Parliament for further debate.

There have also been intense debates over whether India should impose a total ban on private cryptocurrencies. Recently, the Reserve Bank of India also expressed concern over cryptocurrency trading in the country. According to the Financial Stability of the RBI report, private cryptocurrencies “pose immediate risks to protect customers and prevent money laundering (AML) and the fight against terrorist financing (CFT)”.

“They are also prone to fraud and extreme price volatility, given their very speculative nature. “Long-term concerns relate to capital flow management, financial and macroeconomic stability, monetary policy transfer and currency substitution,” the report said.

India, meanwhile, has become one of the booming markets for cryptocurrency trading globally, with more than 15 million crypto investors. According to sources, India is among the world leaders when it comes to cryptocurrency trading and ranked 2nd in the survey of countries that use cryptocurrencies the most.

Published in: India, Regulation

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