Are Cryptocurrencies Securities? Post-GIFT City Regulations & SEBI’s Viewpoint

Regulating Crypto-assets under Indian Securities Law: Are Cryptocurrencies “Securities”? – Analysis Post-GIFT City Regulations & SEBI’s Stance

ABSTRACT: The rapid emergence of crypto-currencies and crypto-assets has posed significant challenges to traditional financial regulatory frameworks worldwide. In India, the regulatory environment remains uncertain, with disparate signals from various authorities. This research investigates the classification of cryptocurrencies as “securities” under Indian law, considering recent developments, including the regulatory framework for GIFT City and the evolving position of the Securities and Exchange Board of India (SEBI).

This research critically analyses the definition of “securities” under the Securities Contracts (Regulation) Act, 1956 (SCRA), and evaluates whether crypto-assets satisfy the legal criteria. It delves into SEBI’s occasional interventions, the RBI’s cautious approach, and recent efforts toward regulatory clarity such as the GIFT City initiative which seeks to position India as a fintech hub with a sandbox-like ecosystem for digital assets.

The study draws from SEBI discussion papers, RBI circulars, International Financial Services Centres Authority (IFSCA) guidelines, and global precedents (e.g., the SEC’s Howey Test in the U.S.). The study also discusses the legal challenges posed by the decentralized and borderless nature of cryptocurrencies and highlights the necessity of a harmonized regulatory regime balancing innovation and investor protection.

In conclusion, the research tries to prove that while most cryptocurrencies might not fall within the classic definition of securities, certain token offerings or digital assets may indeed qualify based on their structure and purpose. Ultimately it calls for SEBI to issue definitive guidance on the classification and regulation of crypto-assets, especially as India explores a potential crypto-framework in the coming years.

Keywords: – Crypto-currencies, Securities, SEBI, GIFT City and Crypto-regulation

I. Introduction: – The rise of cryptocurrencies since the launch of Bitcoin in 2009 has prompted significant debate around their legal and regulatory treatment. With a global market capitalization peaking at over $3 trillion in 2021, crypto-assets have become too significant for regulators to ignore[1]. In India, while the Reserve Bank of India (RBI) initially sought to restrict crypto transactions, the Supreme Court’s 2020 judgment in Internet and Mobile Association of India v. RBI[2] opened the door for renewed regulatory dialogue.

This study aims to explore the intersection of crypto-assets with Indian securities law, particularly in the context of the SEBI’s regulatory framework and the creation of GIFT City as a global fintech hub. The aim is to determine whether and how cryptocurrencies may be categorized as “securities” under Indian law.

II. Legal Framework: Defining “Securities” under Indian Law: – The term “securities” is defined under Section 2(h) of the Securities Contracts (Regulation) Act, 1956 (SCRA)[3]. As per the provision, “securities” include:

• Shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate,
• Derivatives, units of mutual funds, government securities,
• Instruments declared as such by the Central Government, and
• Rights or interests in securities.

A notable aspect of this definition is the inclusion of the term “marketable securities of a like nature,” which implies that an instrument, even if not explicitly listed in the definition, may qualify as a security if it shares characteristics such as transferability, tradability, and the ability to be bought and sold in a market. Crypto-assets, by their very design, may or may not align with this definition. Their classification depends heavily on their characteristics and intended use. Broadly speaking, crypto-assets can be divided into three categories:

• Utility tokens – which provide access to a product or service,
• Payment tokens – primarily used as a medium of exchange, and
• Security or investment tokens – which often promise returns based on the efforts of a third party.

Of these, security tokens bear the closest resemblance to traditional securities. For example, if a crypto-asset is offered to investors with the promise of profits arising from the managerial efforts of the issuer or a third party, it begins to resemble the elements of a traditional investment contract. This is where principles from foreign jurisprudence, particularly the U.S. Howey Test, may be persuasive in the Indian context. The Howey Test, originating from the U.S. Supreme Court decision in SEC v. W.J. Howey Co. (1946),[4]outlines four key elements for an instrument to be considered a security:

a) An investment of money,

b) In a common enterprise,

c) With an expectation of profits,

d) Primarily from the efforts of others.

While Indian courts are not bound by U.S. jurisprudence, the Howey Test provides a structured analytical tool and has been referred to in various global regulatory discussions. Indian regulators or courts may consider similar parameters while interpreting whether a crypto-asset fits within the definition of “securities” under Indian law.

The Securities and Exchange Board of India (SEBI), as the principal regulator of securities markets in India, has regulatory jurisdiction over instruments that fall within the definition of “securities” under the SCRA. SEBI’s mandate includes protecting investors, regulating intermediaries, and maintaining the integrity of the securities market. Therefore, if a crypto-asset is considered a security, it would logically come under SEBI’s regulatory purview.

However, the challenge lies in the lack of a precise, statutory classification of crypto-assets within Indian law. Despite the rapid growth of the crypto market, Indian legislation has yet to formally recognize or categorize these instruments. The absence of clarity has led to inconsistencies in interpretation and regulation. While SEBI has expressed concerns about investor protection in crypto markets, it has not yet issued comprehensive guidelines directly classifying specific types of tokens as securities.  Further complicating the regulatory landscape is the role of other authorities such as the Reserve Bank of India (RBI), which has historically expressed scepticism toward cryptocurrencies as payment instruments, and the Ministry of Finance, which has overseen initiatives like the Virtual Digital Assets (VDA) taxation framework under the Income Tax Act, 1961[5].

Given the overlapping jurisdictions, a coordinated approach involving SEBI, RBI, and other relevant bodies is essential to resolve the ambiguity. Clear classification criteria possibly modelled after international approaches like the Howey Test or the Swiss FINMA (Financial Market Supervisory Authority), token framework could assist in determining whether a particular crypto-asset qualifies as a security under Indian law. Until then, legal interpretation will continue to rely on existing statutory definitions and evolving judicial and regulatory perspectives. Courts, while dealing with disputes involving crypto-assets, may be compelled to interpret the term “securities” expansively, factoring in economic realities and global regulatory trends[6].

III. SEBI’S Stance on Crypto-assets: -The Securities and Exchange Board of India (SEBI), established under the SEBI Act, 1992, serves as the chief regulatory authority overseeing securities markets in India. It is tasked with protecting investors, promoting fair practices, and ensuring the orderly functioning of securities markets. As the cryptocurrency and digital asset ecosystem continues to evolve globally and domestically, SEBI’s role in shaping India’s regulatory response has become increasingly crucial. Although SEBI has not yet issued a formal regulatory framework exclusively dedicated to crypto-assets, its statements, consultation papers, and indirect policy interventions provide significant insight into its stance.

In 2022, SEBI made its position publicly known through responses to queries raised in the Indian Parliament. It categorically stated that it had not approved any cryptocurrency-related investment product or exchange-traded instrument. SEBI emphasized that any action or initiative concerning crypto-assets would require comprehensive policy clarity from the central government. This cautious approach underlined the regulatory vacuum that existed in the Indian crypto space and demonstrated SEBI’s unwillingness to unilaterally assume jurisdiction over a novel and ambiguously defined asset class. SEBI’s response echoed the broader governmental sentiment prevailing at the time: the need for a coordinated inter-agency approach, involving the Reserve Bank of India (RBI), Ministry of Finance, and other regulators. The absence of a legal definition for crypto-assets, combined with concerns over their speculative nature, volatility, and potential use in illicit activities, made unilateral regulation a risky proposition[7].

A consistent theme in SEBI’s public communications has been its concern for investor protection. SEBI has repeatedly flagged the possibility of retail investors being misled or defrauded in the unregulated crypto space. High-profile crypto crashes, misleading advertisements, and influencer-driven hype in India have strengthened SEBI’s resolve to approach the issue conservatively. Crypto -assets, unlike traditional securities, are often marketed directly to consumers through social media without adherence to disclosure norms or risk warnings. In traditional capital markets, SEBI enforces stringent listing, prospectus, and disclosure requirements to ensure that investors make informed decisions[8]. The lack of analogous requirements in the crypto ecosystem raises concerns of asymmetric information, pump-and-dump schemes, and price manipulation factors that could undermine the integrity of Indian capital markets.

Furthermore, many crypto projects operate on opaque mechanisms, with anonymous founders, limited governance, and no investor recourse mechanisms. SEBI’s wariness also stems from the decentralized and cross-border nature of blockchain-based assets, which limits regulatory oversight and complicates enforcement actions.

Despite its cautious approach, SEBI has shown measured enthusiasm for the underlying blockchain technologies, particularly Distributed Ledger Technology (DLT), which powers most crypto-assets. SEBI’s consultation papers and exploratory documents have indicated that it sees DLT as a transformative tool for increasing transparency, efficiency, and auditability in the securities markets.

In 2023, SEBI released a discussion paper exploring the tokenization of real-world assets and the use of smart contracts for post-trade settlement and clearing. This paper proposed potential pilot programs that would integrate DLT into existing market infrastructure in a sandboxed environment. SEBI’s approach here is notably different from outright regulation of cryptocurrencies; instead, it focuses on using blockchain for digitizing traditional securities and financial instruments, rather than regulating native digital tokens like Bitcoin or Ethereum.

The regulator is particularly interested in how tokenization could:

• Reduce transaction costs,
• Accelerate clearing and settlement timelines,
• Enable fractional ownership of high-value assets (like real estate or art),
• Expand financial inclusion through digitally native financial products.

However, SEBI is also mindful of the operational and legal risks associated with tokenization, such as cyber-security threats, smart contract bugs, technological interoperability, and the enforceability of digital rights under Indian contract and property laws.

A central question in the crypto debate is whether specific tokens qualify as “securities” under Indian law. SEBI has not provided a definitive classification, but its actions and statements suggest it is prepared to assert jurisdiction if a crypto-asset behaves like a security—that is, if it involves investment contracts, promises of future returns, or shares of profit. In internal discussions and cross-agency committees, SEBI has reportedly argued that Initial Coin Offerings (ICOs) and Security Token Offerings (STOs) resemble traditional capital-raising activities and should fall within its purview. SEBI has also raised concerns about the substitution effect, where investors may be drawn away from regulated markets towards speculative crypto-assets, leading to a dilution of capital market integrity[9].

If crypto-assets are offered with promotional guarantees, staking rewards, or expected profits from centralized teams, SEBI could classify them as investment contracts and bring them under SCRA’s ambit.

1. GIFT City Regulations: A Regulatory Sandbox: – The Gujarat International Finance Tec-City (GIFT City) represents India’s bold ambition to create a world-class financial hub that competes with global financial centres like Dubai, Singapore, and London. Conceived as a Special Economic Zone (SEZ) with dedicated financial infrastructure, GIFT City has steadily evolved into a testbed for progressive financial regulations. Its strategic aim is not just to attract global fintech companies but also to serve as a sandbox for regulatory experimentation particularly in emerging areas such as digital assets, tokenization, blockchain finance, and decentralized technologies.

At the heart of this initiative lies the International Financial Services Centres Authority (IFSCA), a statutory unified regulator established under the IFSCA Act, 2019[10]. Unlike the fragmented regulatory environment in the mainland where SEBI, RBI, IRDAI, and PFRDA share jurisdiction IFSCA consolidates the regulation of all financial services within the IFSC (International Financial Services Centre), allowing for agile, streamlined policymaking. In 2022, the IFSCA released a comprehensive FinTech Regulatory Sandbox Framework, which applies to fintech entities operating in GIFT City. The framework is modelled after global best practices, including the Financial Conduct Authority (FCA) in the UK and the Monetary Authority of Singapore (MAS), and is built around the principle of controlled experimentation with regulatory exemptions. Key features of the IFSCA sandbox include[11]:

• Eligibility for Indian and foreign entities, allowing global firms to participate;
• Time-bound testing of innovative financial products, services, and business models under real-world conditions;
• Close supervision by the regulator, with pre-defined testing parameters and exit strategies;
• Limited-scale deployment to manage systemic risk and ensure consumer protection;
• Fast-track approvals for successful sandbox participants to transition to licensed operations.

This sandbox has attracted several fintech start-ups, including those exploring blockchain-based solutions for payments, KYC, trade finance, asset tokenization, and smart contract-based settlements.

Although the framework does not explicitly permit cryptocurrency trading, it notably does not exclude digital assets and tokenized instruments from being tested within sandbox conditions. This ambiguity is strategic it allows IFSCA the flexibility to evaluate novel use-cases involving distributed ledger technology (DLT), without making immediate, binding policy commitments.

As per IFSCA’s own definition in multiple consultative documents, “digital asset” encompasses a broad spectrum:

• Tokenized real-world assets (such as real estate, equity, or gold),
• Security tokens or digital representations of ownership,
• Utility tokens used within permissioned ecosystems,
• Digital vouchers or loyalty points with marketability.

The emphasis here is clearly on DLT-based financial innovation rather than unregulated crypto trading, and the sandbox acts as a buffer where legal, operational, and technical risks can be monitored before national rollout[12].

A landmark development was IFSCA’s consultation paper and draft guidelines on tokenized securities and digital asset exchanges, published between late 2023 and early 2024. These guidelines proposed the establishment of a regulated framework for:

• Issuance and trading of tokenized securities on permissioned blockchain networks,
• Launch of Digital Asset Exchanges (DAEs) within GIFT City,
• Licensing of DLT-based custodians and intermediaries,
• Use of smart contracts for clearing and settlement,
• Integration of digital identity frameworks for onboarding and compliance.

The proposals marked an institutional shift in India’s regulatory outlook, particularly because they recognized tokenized securities as legitimate financial instruments, akin to dematerialized securities in conventional markets. By defining them as digitally native units representing ownership in a regulated asset, IFSCA created a parallel regulatory track one that bypasses the legal ambiguities surrounding cryptocurrencies while embracing blockchain infrastructure. Under these proposed norms, issuers would be required to:

• Publish a whitepaper with disclosures similar to a prospectus,
• Comply with KYC/AML obligations,
• Disclose smart contract logic,
• List tokens on licensed DAEs within IFSC jurisdiction.

This represents a conservative yet forward-looking approach, enabling regulated innovation without exposing the broader economy to the volatility and opacity of unregulated digital markets[13].

GIFT City’s tax incentives, light-touch regulations, and innovation-friendly ecosystem have already attracted global financial institutions, asset management companies, and fintech start-ups. With IFSCA opening the door to tokenized products, several international firms particularly from Singapore, UAE, and the UK have begun evaluating entry strategies to pilot digital asset offerings in GIFT City.

The sandbox has become a magnet for projects involving:

• Fractional real estate ownership via tokenization,
• Private equity tokenization for accredited investors,
• Green bonds and ESG instruments issued on blockchain,
• Cross-border remittances using tokenized representations of fiat,
• Programmable securities governed by smart contracts.

For Indian start-ups working on blockchain fintech, the IFSC offers an opportunity to test globally aligned financial products in a regulatory environment that is agile and technology-positive—unlike the uncertain and often hostile treatment of crypto ventures in mainland India. The progress in GIFT City has implications well beyond its 886-acre financial zone. It acts as a pilot zone for India’s evolving digital asset policy. The regulatory experimentation under IFSCA allows policymakers to:

• Study market behaviour and technology feasibility,
• Identify and mitigate operational risks,
• Examine investor responses and transparency challenges,
• Develop legal templates for token ownership, transferability, and enforcement.

Once proven successful in the sandbox, such frameworks could inform broader legislation at the national level, potentially shaping India’s future Digital Asset Regulation Bill or amendments to the Securities Contracts (Regulation) Act (SCRA). Moreover, IFSCA’s initiatives help differentiate between:

• Speculative crypto-assets with no underlying value (e.g., meme coins),
• Regulated tokenized securities representing real economic assets,
• Utility tokens restricted to closed-loop platforms.

This functional classification may pave the way for nuanced regulation—an essential step toward a tiered framework similar to those adopted in the EU (MiCA), Singapore (PS Act), and Switzerland (FINMA Guidelines).

IV. Comparative International Outlook: – The global regulatory landscape for cryptocurrencies has evolved significantly, with different jurisdictions adopting diverse approaches tailored to their unique economic, legal, and social contexts. This comparative analysis explores the regulatory frameworks of the United States, the European Union (EU), Singapore, and India, highlighting their strengths and challenges while proposing a potential hybrid approach for India.

V.I United States: The Howey Test and SEC Oversight

The U.S. Securities and Exchange Commission (SEC) has taken a stringent stance on cryptocurrencies, primarily classifying many crypto-assets as securities under the Howey Test. This test determines whether an asset qualifies as an investment contract based on four criteria: an investment of money, expectation of profits, a common enterprise, and reliance on the efforts of others.

Recent developments in the United States regulatory landscape for cryptocurrencies have drawn considerable attention from investors, financial institutions, and decentralized finance (DeFi) communities alike. Among the most pivotal milestones in 2024 was the U.S. Securities and Exchange Commission’s (SEC) approval of several Bitcoin exchange-traded funds (ETFs). These ETFs, which allow investors to gain exposure to Bitcoin without directly owning the digital asset, have been hailed as a watershed moment in the mainstream adoption of cryptocurrency. By offering institutional-grade investment products, Bitcoin ETFs have the potential to bridge the gap between traditional finance and the emerging digital asset economy. This move also signals increasing institutional confidence in the legitimacy and stability of cryptocurrency markets.

In parallel, the SEC introduced a broader interpretation of the term “dealer” under the Securities Exchange Act. The updated rule now includes entities that manage digital asset portfolios worth $50 million or more. This expansion aims to capture significant crypto market participants who were previously operating in regulatory gray zones. By subjecting them to traditional registration and compliance requirements, the SEC seeks to enhance investor protection, increase transparency, and mitigate systemic risks within rapidly evolving digital asset markets[14].

However, these regulatory changes have sparked a wave of criticism, especially from the DeFi ecosystem. Many argue that the SEC’s approach, while well-intentioned, is overly rigid and fails to account for the unique decentralized structure of blockchain-based financial protocols. Compliance pathways remain ambiguous for decentralized autonomous organizations (DAOs) and smart contract-based platforms that do not fit neatly into existing regulatory frameworks. Critics claim that imposing traditional financial regulations on inherently decentralized systems could stifle innovation, discourage technological progress, and drive projects offshore to more accommodating jurisdictions. There is a growing call for tailored regulatory frameworks that recognize the distinct nature of DeFi while ensuring market integrity and investor safety[15].

V.II European Union: MiCA Regulation: The European Union’s Markets in Crypto-Assets (MiCA) regulation, which officially came into force in 2024, represents one of the most comprehensive and forward-looking legal frameworks for governing digital assets globally. Designed to fill regulatory gaps and provide legal clarity for crypto-assets not currently covered by existing EU financial regulations, MiCA marks a significant step toward creating a unified and secure digital finance ecosystem across the EU[16].

One of the most notable features of MiCA is its clear classification of crypto-assets into distinct categories such as asset-referenced tokens, e-money tokens, and other crypto-assets. This taxonomy enables regulators to apply tailored compliance requirements to different types of digital assets, thereby enhancing legal certainty for both issuers and users. Importantly, MiCA introduces proportionate obligations for Crypto-Asset Service Providers (CASPs), ensuring that regulatory burdens are commensurate with the size and risk profile of the entity.

MiCA also emphasizes strong consumer protection mechanisms. Issuers must publish a white paper outlining key risks, business models, and technical details, thereby improving transparency and helping investors make informed decisions. To further bolster market integrity, MiCA mandates robust governance standards, including requirements for the segregation of client funds, cybersecurity protocols, and anti-market abuse practices.

Another significant advantage of MiCA is the harmonization it offers across the EU. By establishing a single regulatory framework, MiCA facilitates seamless cross-border operations, eliminating the need for separate licenses in each member state. This is especially beneficial for fintech start-ups and established players looking to scale within the European market[17].

Nonetheless, while MiCA aims to strike a balance between innovation and stability, its detailed compliance requirements especially those related to capital, reporting, and governance may present entry barriers for smaller or emerging crypto ventures. As the EU monitors the implementation of MiCA, there may be further refinements to ensure it remains agile enough to accommodate technological advancements without compromising regulatory objectives.

III. Singapore: Differentiated Regulation: Singapore has emerged as a leading hub for fintech and digital assets, largely due to its pragmatic and forward-thinking regulatory approach. The Monetary Authority of Singapore (MAS), the country’s central bank and financial regulatory authority, has crafted a differentiated framework that recognizes the diverse nature of crypto-assets. By distinguishing between utility tokens and investment tokens, MAS ensures that only those crypto-assets with characteristics akin to traditional securities are subjected to stringent oversight under the Securities and Futures Act (SFA). This targeted approach helps avoid unnecessary regulatory burden on blockchain-based projects that serve non-financial functions.

Under the current regulatory regime, investment tokens which confer rights to financial returns or ownership, much like shares or bonds are treated as capital market products and fall squarely within the purview of the SFA. In contrast, utility tokens, which provide access to a blockchain-based product or service, are typically exempt unless they exhibit features warranting further regulation. This clear categorization helps market participants understand their compliance obligations from the outset[18].

In recent years, MAS has intensified efforts to mitigate risks associated with speculative trading. It has prohibited crypto service providers from offering credit lines, leverage, or margin trading to retail investors, in a bid to reduce excessive risk-taking. Moreover, service providers are required to conduct customer suitability assessments to ensure clients are aware of the risks inherent in digital asset trading.

To strengthen asset protection, MAS now mandates that customer assets be segregated and held in statutory trusts. This rule enhances investor confidence by safeguarding funds from misappropriation or insolvency events involving the service provider.

What sets Singapore apart is MAS’s commitment to industry engagement. Through regular public consultations and a willingness to adapt its stance based on technological developments and stakeholder feedback, MAS has cultivated a flexible, innovation-friendly regulatory climate one that encourages responsible crypto growth while ensuring market integrity and investor protection[19].

IV. India: Reassessing Its Stance

India’s regulatory approach to cryptocurrencies has long been marked by uncertainty, oscillating between cautious tolerance and stringent crackdowns. While the Reserve Bank of India (RBI) once imposed a de facto ban on crypto transactions in 2018—later overturned by the Supreme Court in 2020 the country has yet to establish a consistent, forward-looking framework. However, recent developments suggest a reassessment is underway, with Indian regulators increasingly paying attention to international standards, particularly those emerging from the European Union’s MiCA regulation and the U.S. SEC’s evolving stance on digital assets.

India faces several pressing challenges that hinder the growth of its crypto ecosystem. Chief among these is the high taxation burden a 30% tax on crypto gains and a 1% TDS (Tax Deducted at Source) on transactions have created substantial barriers to entry and participation. Additionally, the lack of a clear classification framework means crypto-assets remain in a legal gray zone, creating confusion for both investors and businesses. Moreover, limited institutional support and fragmented regulatory oversight have stifled blockchain innovation and deterred foreign investment in the sector[20].

In contrast to more mature regulatory environments like Singapore or the EU, India’s current approach is reactive rather than proactive. A comparative analysis highlights that while jurisdictions like the U.S. and EU offer structured classification systems and targeted investor protections, India still grapples with ambiguity. The absence of clear cross-border compliance pathways further restricts global integration and scalability for Indian blockchain start-ups.

To move forward, India should consider a hybrid regulatory framework that draws on global best practices. Adopting distinct categories for crypto-assets, such as utility tokens and security tokens, would mirror Singapore’s nuanced approach. Introducing proportionate regulation based on asset risk and market size can ensure that smaller innovators aren’t crushed by compliance costs. Additionally, safeguards like statutory asset trusts and risk assessments can enhance investor protection without discouraging responsible participation.

Crucially, tax reform is essential. By revisiting crypto taxation policies and collaborating with global regulatory bodies, India can foster a balanced environment that promotes both innovation and financial stability. A harmonized and forward-thinking framework would position India as a competitive player in the global digital asset economy.

VI. Conclusion and Recommendations

In conclusion, the regulation of crypto-assets under Indian securities law is a complex and evolving issue. The classification of cryptocurrencies as “securities” depends on their characteristics and intended use, with some tokens bearing resemblance to traditional securities. The Securities and Exchange Board of India (SEBI) has taken a cautious approach, emphasizing investor protection and the need for a coordinated inter-agency response.

The GIFT City regulations, particularly the IFSCA’s sandbox framework, offer a promising avenue for regulatory experimentation and innovation. By embracing blockchain technology and tokenization, India can position itself as a global fintech hub.

Recommendations:

1. Establish a clear classification framework: SEBI should issue definitive guidance on the classification of crypto-assets, drawing from international best practices and jurisdictional approaches.

2. Implement proportionate regulation: Regulatory requirements should be tailored to the size and risk profile of crypto-assets, ensuring that smaller innovators are not disproportionately burdened.

3. Enhance investor protection: Introduce safeguards like statutory asset trusts, risk assessments, and disclosure requirements to protect investors without stifling innovation.

4. Foster international cooperation: Collaborate with global regulatory bodies to establish common standards and best practices for crypto-asset regulation.

5. Revisit crypto taxation policies: Reform tax policies to encourage responsible participation and innovation in the crypto ecosystem.

As the renowned economist, Nouriel Roubini, once said, “The future of finance is digital, and the future of digital finance is global.” By embracing this vision and adopting a forward-thinking regulatory framework, India can unlock the potential of its crypto and fintech sectors, driving economic growth and innovation.

Notes:-

[1]Christos A. Makridis, Michael Fröwis, Kiran Sridhar, Rainer Bohme, The rise of decentralized cryptocurrency exchanges: Evaluating the role of airdrops and governance tokens, Journal of Corporate Finance, Volume 79, 2023, 102358

[2]AIR 2021 SUPREME COURT 2720

[3]42 of 1956

[4]328 U.S 293

[5]PricewaterhouseCoopers, “Taxation Framework of Virtual Digital Assets” (PwC) <https://www.pwc.in/tax-knowledge-hub/taxation-framework-of-virtual-digital-assets.html> accessed April 4, 2025

[6]Ibid

[7]Ohri N, “Exclusive: India’s SEBI Open to Oversight of Crypto Trade, in Contrast to Reserve Bank” Reuters (May 16, 2024) <https://www.reuters.com/world/india/indias-sebi-open-oversight-crypto-trade-contrast-reserve-bank-2024-05-16/> accessed April 4, 2025

[8]“How Do SEBI’s Policies and Regulations Protect Investors? – Indian School of Public Policy” (Indian School of Public Policy –, February 20, 2025) <https://www.ispp.org.in/how-do-sebis-policies-and-regulations-protect-investors/> accessed April 6, 2025

[9]CBCL, “From Concept to Reality: Asset Tokenization’s Emergence in India” (NLIU CBCL, September 10, 2024) <https://cbcl.nliu.ac.in/technology-law/from-concept-to-reality-asset-tokenizations-emergence-in-india/> accessed April 4, 2025

[10]Ahuja N and Tandon S, “Opportunities for FinTech Entities in Gift City” Clasis Law (June 26, 2023) <https://www.lexology.com/library/detail.aspx?g=75c48bc5-86f1-444f-be70-22a274e69a1e> accessed April 5, 2025

[11]“International Financial Services Centres Authority” <https://ifsca.gov.in/FinTechHub2023/ifsca.gov.in/Pages/Contents/FinnTechHub.html> accessed April 5, 2025

[12]Insights L, “India’s GIFT City Consults on RWA Tokenization” (Ledger Insights – blockchain for enterprise, March 7, 2025) <https://www.ledgerinsights.com/gift-city-rwa-tokenization-consultation/> accessed April 6, 2025

[13] “IFSCA Seeks Public Feedback on Regulatory Framework for Tokenization of Real-World Assets” (ELP Law) <https://elplaw.in/leadership/ifsca-seeks-public-feedback-on-regulatory-framework-for-tokenization-of-real-world-assets/> accessed April 6, 2025

[14]Haritonova A, “SEC Crypto Regulation Advancements and Updates [2025]” (PixelPlex, March 15, 2024) <https://pixelplex.io/blog/sec-crypto-regulation/> accessed April 7, 2025

[15]Ibid

[16] Romanenko M, “Here’s the Impact of MiCA Regulations on the European Crypto Market” (CryptoSlate, July 14, 2024) <https://cryptoslate.com/heres-the-impact-of-mica-regulations-on-the-european-crypto-market/> accessed April 7, 2025

[17]Ibid

[18]Singh A, “Singapore Central Bank Rules to Discourage Crypto Speculation, Ease Investment Qualifications” CoinDesk (November 23, 2023) <https://www.coindesk.com/policy/2023/11/23/singapore-central-bank-rules-to-discourage-crypto-speculation-ease-investment-qualifications> accessed April 7, 2025

[19]Ibid

[20]Murithi KM, “India to Revaluate Crypto Regulations in 2025: What Could Change?” CoinGape (February 2, 2025)<https://coingape.com/india-reevaluating-its-crypto-stance-amid-global-adoption-and-policy-changes/> accessed April 7, 2025