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India Securities Regulator Reportedly Looking To Bar IPO Promoters From Holding Crypto

India to ban IPO promoters from holding cryptocurrency

According to a report from the Economic Times. The Securities Board of India may disqualify IPO promoters from elevating funds if they hold cryptocurrencies. The move is reportedly an extension of SEBI’s instructions to securities lawyers, merchant banks, and other stakeholders in the IPO ecosystem relating to cryptos.

This looks to be the latest anti-crypto move by Indian regulators. Forcing IPO promoters to sell their crypto before raising funds would be a massive blow to the industry in the country.

The Economic Times quoted one securities lawyer 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.”

Of course rumors of a potential blanket crypto ban in the country have been floating around for some time now. With reports emerging earlier this month that India’s parliament was looking to fast-track the bill.

People with inside knowledge of the deliberations inside India’s parliament. Believe that holders of cryptocurrency will be given between three and six months to liquidate their virtual crypto holdings once the ban comes into effect.

Even Without The Ban SEBI Could Still Prohibit IPO Promoters from Owning Crypto

Even if the ban doesn’t come into effect some bankers believe SEBI may still prohibit IPO promoters from owning cryptos. Mahesh Singhi of investment banking firm Singhi Advisors noted that SEBI is afraid of a situation. Where IPO promoters divert funds raised from public sales to speculative investments.

For the time being, some IPO promoters have come up with a temporary solution. In the form of an affidavit stating that they will liquidate all cryptocurrency holdings in 24 hours if the rumored ban comes into effect.

This would be the latest in a number of unfortunate regulations from government agencies to hit the Indian crypto market. Most notably in March of 2020, the Supreme Court overturned a central bank ban on banks servicing cryptocurrency exchanges in the country.

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Corey Hansford

Corey has been involved in media and writing since graduating from the illustrious Howard University with a degree in Broadcast Journalism. While relatively new to the cryptocurrency world, he has been writing since 2012 with most contributions coming in the sports world on websites such as LakersNation.com and DodgerBlue.com. Corey is also an avid sports fan who closely follows the Lakers, Cowboys, Dodgers, WWE, and UFC.

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