India’s cryptocurrency space has been facing gloomy days and troubles are far from over. If the latest reports are to be believed, holding cryptocurrency in the country may now become a major problem for promoters looking to raise money through an initial public offering [IPO].
This comes as the latest blow to the country’s crypto ecosystem as the Securities and Exchange Board of India [Sebi] reportedly wants IPO promoters to divest themselves of any crypto holdings before their companies consider filing for public listings.
According to the report, the matter appears to originate from the possibility that the government may ban cryptocurrency that is not issued by the Reserve Bank of India [RBI].
While there is no formal written communication provided by SEBI, however, the Economic Times reported that SEBI has communicated to merchant bankers and securities lawyers involved with the IPO.
A top securities lawyer currently working on some of the largest IPOs was quoted as saying,
“There could be a direction from the government in this regard. The market regulator seems to think that this could become a risk for investors if a promoter holds an asset that is illegal in the country”
The country’s sizeable crypto ecosystem had previously come into the spotlight after concerns regarding the drafting of the framework of Cryptocurrency and Regulation of Official Digital Currency Bill emerged. The bill essentially plans to makes it easy for RBI to launch its own crypto and the second to ban “private cryptocurrencies”.
Hence, the campaign #IndiaWantsBitcoin rose to prominence once again.
This was followed by several platforms such as CoinDCX, WazirX, Unocoin, CoinSwitch Kuber, Zebpay, and PocketBits, to join hands to launch the online platform of the same name. The website was created to enable the citizens to show support for the cryptocurrency ecosystem to their leaders.
Commenting on the lack of regulatory clarity in the country, Sumit Gupta, who happens to be the CEO and Co-founder of CoinDCX, tweeted,
“Crypto will enable Indians to participate on the global level and build companies that can be the next Google, Facebook. Other countries are looking to tap this opportunity, India shouldn’t be left behind in this.”