India securities regulator to reportedly bar IPO promoters from holding crypto

In what appears to be one other anti-crypto transfer by regulators in India, IPO promoters might quickly be pressured to promote their crypto holdings earlier than being allowed to take part in elevating funds.

In keeping with a report by the Financial Occasions, the Securities Board of India might disqualify IPO promoters from elevating funds in the event that they maintain cryptocurrencies.

This transfer is reportedly an extension of SEBI’s directions to securities legal professionals, service provider banks, and different stakeholders within the IPO ecosystem relating to cryptos.

In keeping with a securities lawyer quoted by ET, “There may very well be a path from the federal government on this regard. The market regulator appears to suppose that this might turn out to be a threat for traders if a promoter holds an asset that’s unlawful within the nation.”

As beforehand reported by Cointelegraph, hypothesis is rife in India {that a} blanket crypto ban is imminent. In keeping with individuals with inside information of ongoing deliberations within the nation’s parliament, cryptocurrency holders might be given three to 6 months to liquidate their digital forex holdings as soon as the ban comes into impact.

Earlier in February, studies additionally emerged that India’s parliament was trying to fast-track the crypto bill.

Even when the ban doesn’t come into impact, some funding bankers say SEBI should prohibit IPO promoters from proudly owning cryptos. Talking to ET, Mahesh Singhi of funding banking agency Singhi Advisors mentioned that SEBI is afraid of a state of affairs the place IPO promoters divert funds raised from public gross sales to speculative investments.

For now, some IPO promoters have already give you a short lived resolution within the type of an affidavit stating that they’ll liquidate all cryptocurrency holdings in 24 hours if the rumored ban comes into impact.

India’s crypto market has suffered the brunt of unfavorable laws by authorities companies for years. Again in March 2020, the Supreme Courtroom overturned a central bank ban on banks servicing cryptocurrency exchanges within the nation.

Amid contemporary studies of a complete crypto ban, former Coinbase chief expertise officer Balaji Srinivasan has mentioned that such a transfer can be akin to banning the internet.