India’s new cryptocurrency law set to raise concerns about chit fund, MLM business models

  • India is set to red flag several investment schemes launched by individuals and cryptocurrency exchanges that are similar to chit funds, multi-level marketing and systematic investment plans, as it seeks to build a robust regulatory framework to protect vulnerable rural populations buying risky crypto assets.
  • Regulators including the Reserve Bank of India and Securities and Exchange Board of India have raised concerns before a parliamentary panel about how some individual investors are collecting money in small towns – with business models resembling those of chit funds – for investing in crypto assets.
  • Most exchanges have distanced themselves from individuals collecting money and investing in crypto assets with a business model not dissimilar to those at chit funds.

[Via]

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