SEBI expresses concern over crypto regulation
Recently the Securities and Exchange Board of India (SEBI) has also expressed concern over crypto regulation.
SEBI has outlined the following concerns on cryptocurrencies before the Parliamentary Standing Committee on Finance:
- Crypto assets are decentralized in nature. In such a situation, it will be challenging to protect consumers and enforce any regulatory regime on crypto assets.
- It needs to be clarified whether crypto-currencies can be legally defined as securities.
- Crypto-currency is a type of digital currency. It uses cryptography for security and anti-counterfeiting measures. Each crypto-currency is controlled through a distributed ledger technology called block-chain.
- Although the government has introduced a plan to tax virtual digital assets, the situation on their regulation is still unclear.
- Virtual digital assets are a subset of all digital assets transacted on the block-chain. These include non-fungible tokens (NFI), crypto and other virtual assets.
SEBI’s suggestions for regulation of crypto-currencies:
- Unregulated activities related to crypto assets can be entrusted to an investigative authority appointed by the government.
- The Reserve Bank of India may regulate crypto trading platforms under the Foreign Exchange Management Act (FEMA), 1999. This is because; crypto assets are also available for trading in foreign jurisdictions.
- Consumers availing such products should be protected through the Consumer Protection Act, 2019.
Source – The Hindu