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SEBI Cautions Mutual Funds Against Investing in Crypto Until Regulatory Clarity


cryptoknowmics.com 29 December 2021 09:00, UTC
Reading time: ~2 m

India’s market watchdog, the Securities and Exchange Board of India (SEBI), wants mutual funds firms to stay away from crypto-related investments until the government announces regulations for cryptocurrencies. To date, there is no governing body for crypto investment in India nor any regulations related to it.

SEBI Boss Advises Mutual Funds Against Investing in Crypto Until Regulatory Clarity

Ajay Tyagi, the chairman of the Securities and Exchange Board of India (SEBI) cautioned mutual fund houses investing in any sort of crypto asset-based new fund offers (NFOs) till there is a law for such digital assets in the country.

For now, the much-anticipated Cryptocurrency and Regulation of Official Digital Currency Bill (2021) awaits pending approval from the Cabinet, the highest decision-making authority. The bill was expected to be tabled in the recent winter session of parliament which concluded last week, but it did not happen. The next session is expected in February.

The bill intends to prohibit all private cryptocurrencies in India but allows for certain exceptions to promote the underlying technology of cryptocurrency and its usage. Initially, the government planned on prohibiting digital tokens but is now working to regulate them.

SEBI earlier granted approval to a blockchain ETF from Invesco mutual fund.  However, it got delayed last month due to regulatory uncertainty. The Invesco CoinShares Global Blockchain ETF Fund intends to give investors exposure to companies in the blockchain ecosystem.

Invesco isn’t the only Indian mutual funds company looking to delve into the crypto space. Earlier this month, Navi Mutual Fund filed with the market watchdog for a Blockchain Index Fund of Funds (FoF), which will track the IndxxBlockchain Index. Meanwhile, the said index doesn't track crypto assets directly but instead of mainstream companies like Nvidia, Advanced Micro Devices, and others that have some crypto-related activities.


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