The Securities and Exchange Board of India (SEBI) had cleared blockchain Exchange Traded Funds (ETF).
Regulators have traditionally had a negative stance towards crypto in India.
Now SEBI Chairman, Mr. Ajay Tyagi, has barred the domestic Mutual Funds (MF) from investing in crypto-related offerings until some legislation clarifies the laws for investment into Digital Assets, according to a Times of India (TOI) report.
In the past couple of months, 2 blockchain-related funds filed with SEBI.
In November, SEBI had cleared the Invesco CoinShares Global Blockchain ETF Fund of Fund (FoF) by Invesco Mutual Fund.
The following month, Flipkart founder, Sachin Bansal, backed MF Navi Mutual Fund filed with SEBI for the Navi Blockchain Index Fund of Fund (FoF).
These developments were seen as watershed moments in the history of India’s crypto market.
But due to the negative sentiment about the crypto industry because of the advertisement spree, Invesco had to delay the launch of its ETF. Moreover, uncertainty is hanging over Navi’s fund.
This isn’t the first time SEBI has had a negative stance towards the crypto industry. In October, it forbade Investment Advisers registered with it from advising on unregulated financial instruments including cryptocurrencies.
Lately, the crypto industry has been on the receiving end of criticism. Much of the issues are arising because of regulatory uncertainty. It was expected that the Parliament would legislate on crypto to provide clarity on the way ahead. Unfortunately, the bill was not tabled.
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