India's Crypto Paradox: Why Corporates Can't Raise Funds for Digital Assets

The Bombay Stock Exchange (BSE) has rejected the public listing of Jetking Infotrain, an IT training company, due to its plan to allocate 60% of raised funds to virtual digital assets (VDAs), including Bitcoin. This decision halts India’s progress in adopting global corporate cryptocurrency strategies, where firms like MicroStrategy and Metaplanet hold digital assets on their balance sheets. Jetking had secured in-principle approval from BSE on May 9, 2025, and its board approved a preferential share allotment of ₹6.1 crore (approx. $720,000) in May 2025, with nearly ₹3.96 crore earmarked for crypto investments. The BSE cited ongoing policy reviews on VDAs as the reason for the rejection, stating, “Applications of this type cannot be considered until a clear stance emerges” BSE Bars Jetking’s VDA Plan, Stalling India’s Crypto Push^[1].

India’s regulatory framework remains fragmented, treating cryptocurrencies as “intangible assets” rather than securities or currencies. While companies can invest in VDAs using internal funds, raising equity for such purposes faces scrutiny. BSE’s spokesperson explained that the application was processed under existing norms, but final approval was delayed to address policy-level concerns. “As per revised norms, a decision was taken to reject the application,” the exchange stated Reality check for VDA bets leaves crypto treasuries out …^[6]. This highlights a policy gap: corporate treasuries can diversify with crypto profits but cannot leverage public capital for similar investments.

Jetking’s joint MD and CFO, Siddharth Bharwani, announced plans to appeal to the Securities Appellate Tribunal (SAT), arguing that the Supreme Court’s 2020 ruling affirmed crypto’s legality and need for regulation. The company’s stock price dropped nearly 10% in five days, reflecting investor uncertainty BSE Shuts Door on Jetking IPO Over Bitcoin Holdings, Raising …^[2]. Critics, including CoinDCX CEO Sumit Gupta, criticized BSE’s decision as regressive, noting over 145 global companies have adopted crypto treasuries. Gupta emphasized the irony of blocking a “profit-generating company” while allowing loss-making startups to raise funds BSE Bars Jetking’s VDA Plan, Stalling India’s Crypto Push^[1].

The rejection underscores India’s reluctance to align with global trends. While the country leads in retail crypto adoption, corporate participation remains stifled. Regulators cite concerns over volatility, past scams, and systemic risks. The Raj Kundra Bitcoin scam and exchange hacks have heightened caution, with the Reserve Bank of India (RBI) warning of destabilizing effects from unregulated crypto exposure BSE Rejects Jetking IPO: Is India Against Crypto …^[5]. Unlike the U.S. or Japan, which provide clearer frameworks for corporate crypto holdings, India lacks a unified regulatory approach.

Experts urge immediate clarity on VDA classification under existing laws. Jaideep Reddy of Trilegal highlighted the need for “express regulatory guidance to address policy uncertainty” Reality check for VDA bets leaves crypto treasuries out …^[6]. Meanwhile, banks remain divided on whether investments in U.S. crypto ETFs via RBI’s Liberalised Remittance Scheme are permissible, reflecting broader ambiguity. Moin Ladha of Khaitan & Co. noted that exchanges can deny listings for speculative fund uses until formal regulations emerge BSE Bars Jetking’s VDA Plan, Stalling India’s Crypto Push^[1].

The episode has broader implications for India’s digital asset ecosystem. While global regulators, including the EU’s MiCA and Japan’s Financial Services Agency, are formalizing crypto frameworks, India’s hesitation risks stifling innovation. With no timeline for a comprehensive VDA regulatory bill, entrepreneurs planning crypto treasury models face uncertainty. The case reinforces calls for a dedicated regulator or self-regulatory organizations to bridge the gap between innovation and oversight FIG Paper (No. 41 – VDA Series 4) Global Crypto …^[8].