In today's FirstScroll, we talk about SEBI's long-running battle with finfluencers and ask the uncomfortable question: can a regulator ever really win a fight that lives on Telegram?
The Story
Picture a regulator trying to plug a leak in a dam.
It spots a crack, rushes over, and seals it shut. Job done. Except by the time it turns around, three new cracks have appeared somewhere else. So it patches those too. And then three more show up. The dam keeps holding, mostly. But the regulator never gets to stop running.
That, in a nutshell, is what SEBI has been doing with finfluencers for the better part of three years now.
But before we get to why it can't seem to win, let's back up and ask the obvious question. Why is India's market regulator even spending its energy chasing people who post stock tips on Instagram and YouTube?
The answer starts with a number that should make you pause.
Roughly 27% of Indians are financially literate. Meanwhile, during and after the pandemic, crores of first-time investors opened demat accounts and walked into the stock market with cheap smartphones, free trading apps, and almost no idea what they were doing. So naturally, they went looking for someone to explain things. And the people who showed up to explain weren't certified advisors sitting in glass offices. They were charismatic strangers on a screen, talking about "multibagger" stocks and "guaranteed" monthly returns in language that actually made sense to a 24-year-old.
For a lot of people, that felt like democratised finance. No gatekeepers. No fancy jargon. Just a friendly face telling you where the money is.
Here's the catch though. Some of these friendly faces weren't educating anyone. They were running scams.
Take the case that became the poster child for all of this. A finfluencer who went by the name "Baap of Chart" was found to be promising followers minimum profits of ₹3 lakh a month, climbing all the way up to ₹6 lakh, in exchange for subscription fees. SEBI eventually barred him and ordered him to cough up around ₹17 crore. And he wasn't alone. The regulator later cracked down on a far bigger fish, a popular trading academy, concluding that it was effectively running an unregistered advisory business under the cover of "education", and ordered it to impound over ₹546 crore. That's not a typo. Five hundred and forty-six crore rupees.
So this is the thing SEBI is actually worried about. Not the harmless guy explaining what a mutual fund is. It's the operator who dresses up stock manipulation as a masterclass.
Now you might wonder, what's the harm in a few bad tips? People lose a little money, learn their lesson, move on. Right?
Not quite.
The really dangerous version of this game is called pump-and-dump. And it works exactly like it sounds. An operator quietly buys a small or mid-cap stock that barely anyone trades. Then they go to their army of followers and start hyping it up, "this one's going to 3x", "load up before it's too late". Thousands of trusting retail investors rush in to buy. The price shoots up. And right at the peak, the operator dumps their entire holding onto those very followers and walks away rich, leaving everyone else holding a stock that promptly crashes.
In May 2026, SEBI passed a landmark interim order banning a whole web of finfluencers for running precisely this kind of racket, freezing their accounts in the process.
So SEBI's logic is simple. When someone with millions of followers can move a stock price with a single post, they aren't just an influencer anymore. They're a market force. And market forces need to be regulated.
Which brings us to how SEBI actually went to war.
The first move came back in 2024, and it was clever. Instead of trying to police every random account on the internet, an impossible task, SEBI went after the money. It barred all the entities it does control, your brokers, mutual funds, and other registered intermediaries, from associating with unregistered finfluencers. No sponsorships. No referral links. No "use my code for a discount" deals. The idea was to choke off the revenue pipe. If finfluencers couldn't get paid by the big regulated players, the whole influencer-marketing economy around stock tips would dry up.
And to a degree, it worked. Brand deals reportedly took a hit, and agencies grew cautious about who they partnered with.
But finfluencers had another trick. They'd simply rebrand themselves as "educators". After all, education is protected. Anyone can teach. So instead of saying "buy this stock", they'd run a live session, share their screen showing real-time market data, and "teach" you which stock they were buying right now. Wink wink.
So in January 2025, SEBI closed that loophole too. It ruled that genuine educators cannot use stock price data from the preceding three months. You want to teach? Fine. But you'll have to do it using prices that are at least three months old. That single rule was surgical, because a trading tip is only useful if it's about now. A three-month-old chart is useless for hustling people into a trade today.
And SEBI kept going. It pushed registered advisors to use verified email IDs and phone numbers for their ads. It nudged Meta into verifying that anyone running investment ads in India actually had SEBI registration. It proposed making influencers display their registration numbers right on their profiles. And by late 2025, the Finance Ministry confirmed SEBI could direct social media platforms to take down misleading financial content altogether.
On paper, that's a tightening net. Crack after crack, sealed.
So why can't SEBI declare victory?
Because of where this game is actually played.
You see, SEBI's real power is over registered entities and public platforms it can monitor. But a huge chunk of the tip-peddling has quietly migrated to places SEBI can barely see. Private Telegram channels. WhatsApp groups. Closed Discord servers. The moment the spotlight hit public posts, the operators went underground, into encrypted, invite-only rooms where a regulator has no easy way to even know what's being said, let alone prove it's illegal.
A SEBI official admitted as much, conceding that monitoring social media simply isn't easy, and that the realistic goal is to at least catch the ones "cashing out" by charging for advice.
And that's the heart of the problem. SEBI is fighting a game of whack-a-mole where the moles can teleport. Ban a public account, and the operator pops up in a private group. Block one Telegram channel, and a new one appears overnight with a slightly different name. The barrier to becoming a finfluencer is a phone and some confidence. The barrier to catching one is an investigation, an order, and a legal process that can take years.
There's also a genuine philosophical knot SEBI is trying not to trip over. Where exactly does free speech end and illegal advice begin? If a creator says "I personally think the market looks overheated", is that an opinion or a recommendation? SEBI itself has said it's trying to bring finfluencers under the net "without trampling on freedom of expression". Draw the line too loose, and scammers slip through. Draw it too tight, and you've banned ordinary people from talking about money on the internet. Neither is a clean win.
So can SEBI actually win?
Here's the honest answer. If winning means wiping finfluencers off the internet, then no. That war is unwinnable, in the same way you can't really "win" against spam email or fake reviews. The medium is too vast, too fast, and too easy to re-enter.
But maybe that was never the real goal.
Because if you look closely, SEBI isn't trying to kill the category. It's trying to change its economics. By cutting off brand money, scaring away regulated partners, and making the genuinely fraudulent stuff legally radioactive, SEBI is slowly making the scammy, manipulative version of finfluencing expensive and risky, while leaving room for honest educators to keep doing their thing. It's less about catching every mole and more about making the whole field less rewarding for the bad actors.
In other words, SEBI may never win the war. But it might just win the more important battle, the one for what kind of financial advice becomes normal, trusted, and worth paying attention to.
And for the crores of new investors still trying to figure out where to put their money, that might be the only victory that actually matters.
Until next time…
