Crypto’s Decentralized Nature Makes Regulation Challenging – According to reports, the Securities and Exchange Board of India (SEBI) told Parliament’s Standing Committee on Finance that the decentralized nature of crypto assets makes consumer protection and regulatory enforcement challenging.
SEBI was quoted in local media as saying: “Crypto assets are maintained in decentralized distributed ledgers.”
“There’s a good chance that unauthorized trades will be executed that aren’t compliant with any regulatory framework.”
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The market regulator stressed the need of determining whether crypto assets are securities. “If crypto assets are not prohibited, then feature-based characterization of the tokenized versions of the assets is required, which may attract the attention of various sectors regulators,” SEBI noted.
The regulator noted that there might be more than one cryptocurrency regulator, with different regulators overseeing different aspects of the industry.
The Consumer Protection Act, according to SEBI, should protect consumer products. Under the Foreign Exchange Management Act, the Reserve Bank of India (RBI) could possibly regulate crypto trading platforms. SEBI went on to say:
“A digital currency serves as a link between a foreign jurisdiction’s fiat currency and the Indian rupee.”
SEBI-regulated stock exchanges are unable to trade crypto assets until they are declared securities, according to the market regulator. “A stock exchange can only provide for ‘assisting, regulating, or controlling the activity of buying, selling, or dealing in securities,” according to Section 2(j) of the SCRA, 1956.
The SEBI had also proposed to the Advertising Standards Council of India a number of measures. SEBI suggested prohibiting celebrities and public figures from endorsing cryptocurrency products last month.
While cryptocurrency income and transactions are taxed in India, the country’s government has yet to establish a regulatory framework for cryptocurrency assets.
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Crypto’s Decentralized Nature Makes Regulation Challenging – On crypto regulations, authorities from the Finance Ministry have been discussing with the World Bank and the International Monetary Fund (IMF). The government will not rush to issue a crypto policy, according to the country’s finance minister. A crypto consultation document is now being finalized by the government.
