Investment advisors banned from crypto activities in India, warns regulator – regulation

The Securities and Exchange Board of India (SEBI) has issued a warning that registered investment advisers cannot engage in unregistered activities. This warning covers crypto activities as crypto is currently an unregulated industry in India.

SEBI warns registered investment advisors that they cannot engage in crypto activities

Securities and Exchange Board of India (SEBI) on Thursday issued a notice on "unregulated products".

“SEBI has come to the notice that some Registered Investment Advisers [RIAs] are engaging in unregulated activities by providing a platform for buying/selling/trading unregulated products, including digital gold,” SEBI stated.

The regulator warned that “the conduct of such unregulated activities, including trading (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 SEBI (Investment Advisers) Regulations 2013,” concluded:

Investment advisors are hereby advised to refrain from such unregulated activities. Any dealings in unregulated activities by investment advisers may give rise to actions deemed appropriate under the SEBI Act, 1992 and the rules thereunder.

Although SEBI's notification does not specifically mention crypto assets, the crypto industry in India is currently unregulated, so all crypto-related activities are considered as “unregulated activities”.

However, the Indian government is working on a cryptocurrency law. In July, Finance Minister Nirmala Sitharaman confirmed that the crypto bill ready for the cabinet. In September, Jayant Sinha, a lawmaker from the ruling Bharatiya Janata Party, said that crypto legislation distinctive and unique.

However, the Reserve Bank of India (RBI) had continued to “ serious concerns “ about cryptocurrencies. The central bank is now working on its own digital currency, which is... phases. The RBI expects to unveil a digital rupee model by End of year.

Do you think investment advisors should be able to engage in crypto-related activities? Let us know in the comments section below.

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