The Securities and Exchange Board of India (SEBI), India’s market regulator, says the decentralized nature of crypto assets makes consumer protection and regulatory enforcement difficult.
SEBI on crypto regulation
The Securities and Exchange Board of India (SEBI) reportedly told the Parliamentary Standing Committee on Finance that the decentralized nature of crypto assets makes it difficult to enforce any consumer protection or regulation of this asset class.
Noting that “crypto assets are managed on a decentralized distributed ledger,” SEBI was quoted by local media as saying.
There is a very high possibility of unauthorized transactions being executed that are not consistent with any regulatory framework.
Market regulators stressed the need to clarify whether crypto assets are securities. SEBI noted that “if crypto assets are not prohibited, they need to be characterized based on the characteristics of the tokenized version of the asset, which may attract the supervision of regulators in different sectors.”
The regulator explained that there could be multiple regulators for crypto, noting that different aspects of the crypto industry could be supervised by different regulators.
SEBI detailed the need to protect consumer products through consumer protection laws. The Reserve Bank of India (RBI) can also regulate crypto trading platforms under the Foreign Exchange Management Act (FEMA), SEBI further stated, and the RBI can also regulate crypto trading platforms under the Foreign Exchange Management Act (FEMA).
digital currency will act as a bridge between fiat currency and the Indian rupee in foreign jurisdictions.
The market regulator explained that stock exchanges regulated by SEBI cannot trade crypto assets they are not declared securities. The regulator noted that under Section 2(j) of the SCRA 1956, “a stock exchange may provide only for “assisting, regulating or controlling the business of buying, selling or trading in securities.”
SEBI had also proposed several measures to the Advertising Standards Board of India. Last month, SEBI proposed prohibiting celebrities and public figures from endorsing crypto products.
Crypto income and transactions are taxed in India, but the government has yet to introduce a regulatory framework for crypto assets.
Finance Ministry officials are in talks with the World Bank and the International Monetary Fund (IMF) about regulating crypto. The country’s finance minister said that the government will not rush to issue a crypto policy. The government is currently finalizing a crypto consultation paper.
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