SEBI (Securities and Exchange Board of India) has reportedly told mutual fund companies to avoid investing in crypto asset-based investments till the government of India develops cryptocurrency legislation.
Ajay Tyagi, chairman of the Securities and Exchange Board of India (SEBI), is reported to have said Tuesday that the market regulator does not want mutual fund companies to participate or invest in any crypto asset-based new fund offers (NFOs) until the Indian Government has come up with cryptocurrency legislation.
The government of India is currently working on cryptocurrency legislation. A crypto bill was slated to be considered in the winter session of parliament but it did not happen. Reports indicate that the government is currently reworking the bill.
The launch of Invesco Mutual Fund‘s crypto-based exchange-traded fund (ETF) has already been delayed, and Navi Mutual Fund’s application is still awaiting approval by SEBI.
SEBI’s warning comes after asset management company Invesco Mutual Fund delayed the launch of its blockchain fund — the first of its kind in India — because of legislative uncertainty, even though they had SEBI’s approval.
There are other mutual funds in India looking to get involved in the crypto space as well. Navi Mutual Fund filed a draft with SEBI earlier this month for a Blockchain Index Fund of Funds (FoF) that would track the IndxxBlockchain Index.
SEBI approved the fund as the first in India with exposure to the blockchain ecosystem to invest in Invesco Coinshares Global Blockchain UCITS ETF. The portfolio of the underlying fund includes Coinbase Global, GMO Internet, Kakao Corp., SBI Holdings, Hive Blockchain Technologies, Bitfarms, Bit Digital, and Microstrategy as of Nov. 2.
The Indian government has not made an official statement regarding cryptocurrency regulation or ban. However, there are reports that crypto assets will be regulated with SEBI as the chief regulator.
In the meantime, the RBI, India’s central bank, is urging the government to ban cryptocurrency completely. Noting that a partial ban cannot be effective, Shaktikanta Das, Governor of the Reserve Bank of India, has expressed serious concerns about cryptocurrencies.
