The debate on bringing cryptocurrencies and ICOs under the regulatory purview is gaining stride across the globe with China and Russia actively discussing the same within them. Now, Indian regulator Securities Exchange Board of India (SEBI) is evaluating whether such instruments can be brought under its regulatory framework.
SEBI independently is evaluating if these instruments can be brought under its existing legal framework or certain amendments in the law would be required if the government decides to regulate it. The subject has been going extensive through discussion between different government agencies including the RBI for long. The RBI in its view thinks that as these instruments are best described as securities so SEBI should be the regulating body.
A person familiar with the development but wants his identity anonymous said: “While it is a bit early to say that SEBI wants to regulate cryptocurrencies and ICOs, it is true that work is being done on this subject so that it has something concrete and specific to present to the government.”
India has been witnessing a gradual rise in Bitcoin trading with more than 2500 Indians invest in Bitcoin daily. The government wants to have a clear view on its legality to continue it as a legitimate means of trading against the currency. Several legal experts share a different view on government regulating the cryptocurrencies. Sumit Agrawal, partner, Suvan Law Advisors, and a former SEBI law officer said on the development: “Bitcoins are neither ‘commodities derivatives’ nor ‘securities’ under Securities Contracts (Regulation) Act, 1956. Amending definition of ‘securities’ alone may not resolve the issue of bitcoin regulation as there are numerous issues revolving around”.
Sandeep Goenka, co-founder of ZebPay feels that the industry is in more urgent need of self-regulatory organisations (SRO) than a regulator as it will not create a hindrance to innovation but will also act a responsible manner. It will help to address the teething problems including the need to lay down the principles to take care of concerns like money laundering and other possible misuses.