Cross-border enforcement of blockchain securities: Jurisdictional arbitrage, regulatory fragmentation, and reform pathways in India’s dual regulatory architecture

Purpose This paper aims to examine the challenges of cross-border enforcement of blockchain securities within India’s dual regulatory architecture comprising mainland securities regulation and the Gujarat International Finance Tec-City (GIFT) City regime. It seeks to identify how jurisdictional arbitrage, regulatory fragmentation and technological decentralisation undermine effective supervision and investor protection. By analysing comparative international models, the study aims to propose coherent legal and institutional reform pathways that balance innovation with enforceable, function-based securities regulation in India’s digital asset ecosystem. Design/methodology/approach This study adopts a doctrinal and comparative legal research methodology. It embarks on a systematic analysis of Indian statutory frameworks governing blockchain securities, including the Securities Contracts (Regulation) Act, 1956, Prevention of Money Laundering Act, 2002, Digital Personal Data Protection Act, 2023 (DPDP) and the International Financial Services Centres Authority (IFSCA) regime, to examine enforcement gaps arising from India’s dual regulatory architecture. The research integrates comparative insights from the United States, the European Union Markets in Crypto-Assets (MiCA), Singapore and Japan to assess cross-border enforcement practices and jurisdictional tests. Judicial decisions, regulatory actions and international standards such as the Financial Action Task Force and united nations commission on international trade law (UNCITRAL) are analysed to identify structural arbitrage risks and to develop reform-orientated, function-based enforcement pathways suitable for India’s evolving digital asset ecosystem. Findings From the study, it is evident that the lack of a harmonised legal definition of blockchain securities in India, coupled with the dual enforcement regime between the Securities Exchange Board of India (SEBI) and IFSCA, creates significant opportunities for regulatory arbitrage. When the authors compare various locations, jurisdictions that categorise locations based on activities, have coordinated supervision and have specialised enforcement agencies are more effective at regulating. The study also indicates that Decentralised Autonomous Organisation models, data protection constraints under the DPDP Act and the slow mutual legal assistance treaty (MLAT) process hinder cross-border enforcement, investor protection and increase the ease of regulatory evasion through GIFT City structures. Research limitations/implications The research is limited to the doctrinal and comparative examination and does not involve the integration of empirical enforcement information or stakeholder interviews. The acceleration of developments in the regulatory space related to digital assets may have an impact on the sustainability of specific legal observations. However, the research has important policy implications, emphasising the need for a unified statutory framework, improved inter-regulatory coordination and simplified cross-border cooperation mechanisms to ensure enforcement while upholding innovation-driven regulatory policies in India. Practical implications The results provide useful insights for policymakers by identifying ways to address jurisdictional arbitrage in the regulation of blockchain securities. They support the use of function-based token classification, improved SEBI-IFSCA cooperation and the speedy development of cross-border enforcement frameworks. For industry players, the research helps to provide clarity on regulatory requirements related to licencing, governance, data protection and anti-money laundering, which can help with risk management and facilitate sustainable innovation in the Indian digital asset space. Social implications Well-regulated blockchain securities improve investor confidence, reduce financial fraud and protect retail participants from international wrongdoing. The proposed regulatory reforms help improve financial market transparency and stability by filling the enforcement and regulatory arbitrage gaps. Improved regulation also helps to improve public confidence in new financial technologies. This is crucial for public participation in digital markets, as financial innovation should not undermine societal values. Originality/value This paper adds original value to the existing body of knowledge by examining the cross-border enforcement of blockchain securities from the point of view of the dual regulatory system in India, which is an area that has not been fully explored by existing scholarship. The paper presents a reform-focused framework that combines functional token categorisation, harmonised oversight and fast-track cross-border cooperation, thus providing a context-appropriate yet universally valid paradigm for the regulation of digital securities.