SEBI Bars Financial Advisers from Advising on Crypto

Any such dealing shall attract action from the Securities and Exchange Board of India (SEBI).

On Thursday, SEBI issued a circular, banning investment advisers registered with it from advising on unregulated financial instruments including cryptocurrencies.

“It has come to the notice of SEBI that some registered Investment Advisers are engaged in unregulated activity by providing platform for buying/ selling/ dealing in unregulated products including digital gold,” the regulator said.

The licensed advisers are only authorised to provide services for markets or assets regulated by the SEBI.

The market regulator considers investment advisory for unregulated markets as a violation of “provisions of Section 12(1) of the SEBI Act, 1992 read with the SEBI (Investment Advisers) Regulations, 2013.”

Any such dealings will be prosecuted according to the provisions under the SEBI Act, 1992 and regulations framed thereunder.

So, registered financial advisers can no longer provide advice for crypto investment.

The crypto industry is witnessing an exponential rise in India.

India ranks 2nd in the world for crypto adoption as per the Chainalysis Global Crypto Adoption Index and 6th in the Chainalysis Global DeFi Adoption Index.

In the past 3 months, two crypto exchanges CoinDCX, and CoinSwitch have achieved the coveted unicorn status.

This proliferation may have concerned the regulator about the increasing investment by retail investors and prompted such action.

It could be seen as a protective measure for both the investors and advisers as no one can hold someone accountable for an unregulated activity.

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