Regulatory Uncertainty Surrounds Digital Asset Treasury Companies in India

Strategic Insights -

Amidst a regulatory void in India, the listing of shares by Jetking Infotrain, a company that had planned to invest in cryptocurrencies, has been rejected by the Bombay Stock Exchange (BSE). This move has led to a question mark over the future of digital asset treasury companies, which are gaining popularity in advanced markets. The BSE has stated that the policy on investment in virtual digital assets (VDAs) is under review, and until a final view emerges, it will not process applications of this nature.

Key Takeaways:

  • Jetking Infotrain, an IT training company, had planned to raise funds through a preferential stock offering to invest in cryptocurrencies, with a majority of the proceeds (Rs. 3.96 crore) to be invested in buying VDAs.
  • The company received an in-principle approval from the BSE on May 9, 2025, but its listing application was rejected, citing the policy on investment in virtual digital assets (VDAs) being under review.
  • The rejection of Jetking's listing application indicates that capital market authorities are averse to listed companies raising funds through stock sales to invest in cryptocurrencies.
  • The stance taken by BSE forces some entrepreneurs to shelve their plan to launch VDA treasury entities, which are similar to collective investment plans but have greater flexibility.
  • Indian companies can invest in VDAs, but there is an increasing need for clearer classification of virtual digital assets under existing laws.
  • The regulatory uncertainty has also created ambiguity among banks, with some questioning whether investments in US crypto ETFs are kosher.
  • Experts suggest that a clear regulatory framework is needed to guide listed companies on how to deploy capital into crypto or other VDAs.

Statistics:

  • Rs. 6 crore: The total value of shares to be allotted to investors in Jetking Infotrain's preferential stock offering.
  • Rs. 3.96 crore: The amount to be invested in buying VDAs, which is approximately 60% of the total proceeds.
  • 3.96 lakh shares: The number of shares to be allotted to investors.
  • 5 years: The time since the Supreme Court said that cryptos were not illegal but require regulations.
  • Rs. 1.04 crore: The remaining amount to be used for providing education and skill development, general corporate purposes.

Sources:

  • Jetking Infotrain's documents filed with BSE on May 23, 2025.
  • Interview with Siddharth Bharwani, Joint MD and CFO of Jetking Infotrain, as quoted in The Economic Times.
  • Quote from an ABSE spokesperson as reported in The Economic Times.
  • Quote from Jaideep Reddy, partner at Trilegal, as reported in The Economic Times.
  • Quote from Moin Ladha, partner at Khaitan & Co., as reported in The Economic Times.
  • The Economic Times article, "Regulatory uncertainty surrounds digital asset treasury companies in India".