Sebi wants promoters to sell crypto before IPO
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Synopsis
Sebi's diktat for promoters to offload crypto assets filing for an IPO appears to stem from possibility that the government may ban cryptocurrency that’s not state issued.
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Mumbai: Holding cryptocurrency may become a hindrance for promoters looking to raise money through an initial public offering (IPO). The Securities and Exchange Board of India (Sebi) wants promoters of such companies to sell off any cryptocurrency they have before raising funds, said several people with direct knowledge of the matter.
In the past few weeks, Sebi has communicated this to merchant bankers, securities lawyers and even company executives involved with the IPO process. They told ET that the matter appears to stem from the possibility that the government may ban cryptocurrency that’s not state issued. Sebi didn’t respond to queries. “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,” a top securities lawyer currently working on some of the largest IPOs told ET.

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