The Securities and Exchange Board of India (SEBI) has issued a warning that registered investment advisers are not allowed to engage in unregistered activities. This warning includes crypto activities since crypto is currently an unregulated industry in India.
SEBI Warns Registered Investment Advisers Cannot Engage in Crypto Activities
Indian securities and commodity market regulator, the Securities and Exchange Board of India (SEBI), issued a notice regarding “unregulated products” Thursday.
“It has come to the notice of SEBI that some registered investment advisers [RIAs] are engaged in unregulated activity by providing platform for buying/ selling/ dealing in unregulated products including digital gold,” SEBI explained.
The regulator warned that “Undertaking such unregulated activity including dealing (i.e. advisory, distribution and execution/ implementation services) in digital gold by investment advisers is not in accordance with the provisions of Section 12(1) of the SEBI Act 1992, read with the SEBI (Investment Advisers) Regulations 2013,” concluding:
Investment advisers are, hereby, advised to refrain from undertaking such unregulated activities. Any dealing in unregulated activities by investment advisers may entail action as deemed appropriate under the SEBI Act, 1992 and regulations framed thereunder.
Although SEBI’s notice does not explicitly mention crypto assets, the crypto industry is currently unregulated in India, so all crypto-related activities are considered “unregulated activities.”
The Indian government is, however, working on a cryptocurrency bill. In July, Finance Minister Nirmala Sitharaman confirmed that the crypto bill was ready for the Cabinet. In September, Jayant Sinha, a lawmaker with the ruling Bharatiya Janata Party, said that the crypto legislation will be distinct and unique.
However, the Reserve Bank of India (RBI) continued to have “serious concerns” regarding cryptocurrencies. Meanwhile, the central bank is working on its own digital currency, which will be launched in phases. The RBI expects to unveil a digital rupee model by the end of the year.
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