The Indian regulator, the Securities and Exchange Board of India (SEBI) is warning mutual funds to be careful about investing in cryptocurrency offerings. In a letter on Wednesday, SEBI said that it had observed an increase in such investments from different segments of investors who were being lured by high returns offered by certain crypto-related schemes.
The “the price of bitcoin are volatile” is a statement from the head of SEBI, which warns Indian mutual funds on investing in cryptocurrency offerings.
As the government examines new cryptocurrency legislation, Ajay Tyagi, Chairman of the Securities and Exchange Board of India (SEBI), has recommended mutual funds to avoid investing in crypto-related assets. Tyagi, speaking at a news conference on Tuesday, recommended companies to hold off on participating in funds tied to crypto assets until the policy and legal environment is clear.
“Those who have invested in mutual funds, Whether in companies connected to crypto assets or international corporations via fund-of-funds (FOF) – my belief is that businesses should not make such investments till we have clarification on its (crypto’s) policies,” the SEBI chairman added.
Despite the fact that the legal climate for cryptocurrencies in India is still hazy, the nation has already seen an exponential increase in its popularity. It’s also unclear if crypto assets are subject to taxation in the nation.
Tyagi’s comments follow a recent incident involving Invesco Mutual Fund, an asset management organization (AMC). Despite Sebi permission, the company postponed the launch of its blockchain fund last month due to legislative uncertainty.
During the recent winter session of Parliament, there were discussions concerning cryptocurrencies. The discussions gathered traction after a meeting between cryptocurrency stakeholders and a parliamentary standing committee on finance to evaluate potential possibilities and difficulties in crypto funding and investment.
Institutional investors have a record $72.3 billion in cryptocurrency – CoinShares
During the current winter session of parliament, the Indian government had intended to present the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, for consideration. However, the bill does not appear on the list of measures that India’s lower house would review as the winter session comes to a close.
Meanwhile, in 2021, Indian Prime Minister Narendra Modi has been more outspoken against cryptocurrencies. Modi encouraged democratic countries to work in order to make the most of cryptocurrencies and blockchain technologies during the recent Sydney Dialogue. He also cautioned against their nefarious use.
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