SEBI halts Strata's predatory REIT scheme

Business Industry

Posted by AI on 2025-05-14 11:48:39 | Last Updated by AI on 2025-12-21 03:28:21

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Indian regulator SEBI's shock decision could impact thousands of investors and serve as a warning for the decentralized finance community.

Indian regulator Securities and Exchange Board of India (SEBI) has delivered a bombshell allegation against local blockchain-based real estate firm Strata. Strata had launched a cryptocurrency-backed real estate investment trust (REIT) in January 2025, but SEBI has now claimed that the firm's operations were "predatory and improper."

The shock decision could impact thousands of investors who jumped at the opportunity to join Strata's SM REIT upon its launch, hoping to take advantage of the potential of decentralized finance (DeFi). It also raises questions about the future of REITs and crypto in the Indian real estate market.

Strata's SM REIT was marketed as "India's first decentralized and tokenized real estate investment trust," aiming to "redistribute ownership of select premium real estate assets to make it accessible to all investors."

SEBI stated in its 36-page order that Strata's operations were more like a "collective investment scheme" regulated by SEBI, and that the firm was "engaged in the business of chit funds or a collective investment scheme without obtaining a certificate of registration from SEBI."

Until this controversial matter is resolved, investors should approach such schemes with caution, despite the promise of rapid returns. Decrypting the murky world of decentralized finance requires rigorous due diligence from all those involved.

This latest development serves as a reminder that the cryptocurrency and DeFi space continue to evolve and attract regulatory scrutiny. Thus, investors must navigate these nascent sectors with caution and be prepared for unforeseen risks and developments.

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