India’s securities regulator is reported to be working on barring all IPO organizers from holding cryptocurrencies. This is another statement move from the government following its cryptocurrency ban.

The Indian government has shown no subtlety in its approach to banning cryptocurrencies from the country.

Now, it appears to be extending its anti-crypto stance to the traditional financial industry. Initial Public Offerings (IPO) promoters would be the first to feel its wrath.

Recently, the Economic Times reported that the Securities and Exchange Board of India (SEBI), India’s securities regulator, is planning to force all IPO participants to divest all crypto holdings before proceeding with their listings.

Per the report, crypto selloffs will most likely become a prerequisite for anyone looking to raise funds through an IPO, forming what the latest in New Delhi’s plans to eradicate digital assets is.

The news source reported that the SEBI plans to send notices to merchant banks, underwriters, securities lawyers, and all other stakeholders in India’s IPO space, warning them to stay off digital assets.

A securities lawyer told the news source that this would most likely be a government directive, as they could believe that an IPO promoter holding an illegal asset could pose a risk to investors.

Some investment bankers have also explained that the SBI might move ahead with the restriction even if the Reserve Bank’s ban on digital assets doesn’t pass parliamentary approval – an improbable process on its own.

Mahesh Singhi, an executive at investment banking firm SInghi Advisors, explained that SEBI is looking to avoid a situation where IPO promoters divers their raised funds to crypto investments, which remain highly speculative.

SEBI has yet to release any written notifications to that effect, but many stakeholders seem to believe that this restriction will come into effect soon.

The IPO restriction is the latest approach from the Indian government, which has vowed to disrupt the crypto sector in the country. First announced last month, the ban is gaining traction ahead of a presentation at the country’s lower parliament.

Titled the “Cryptocurrency and Regulation of Official Digital Currency Bill,” the proposal is already in consideration at the Rajya Sabha, India’s upper house of parliament. However, the current budget session is expected to run till April 8, with a recess session already ongoing until March 7.

Earlier this month, local news source CNBC-TV18 reported that the government might as well skip the parliamentary process altogether. Per the report, it could look to take the “ordinance route” to ban the use of private digital assets while also allowing the Reserve Bank to create a digital framework for its planned Central Bank Digital Currency (CBDC).

CNBC-TV18 reported that all appropriate parties had already begun drafting the ordinance as they look to pass the crypto ban proposal within a month. Ordinances usually allow the Indian government, through President Ram Nath Kovind, to bypass parliament and take action.

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