Holding Digital Gold? SEBI Issues Warning Against Unregulated ‘Digital Products’
The Securities and Exchange Board of India (SEBI) has publicly cautioned investors that “Digital Gold/E-Gold Products”, marketed as an alternative for investment in physical gold, are unregulated and may carry significant risk.
What “Digital Gold” Is SEBI Referring To?
Here, “digital gold” refers to online platforms or apps (such as Jar, Gullak, IndiaGold, etc.) that allow individuals to buy small quantities of gold, often for very low amounts (₹10, ₹100, etc.).
In return, the platform claims to store an equivalent quantity of physical gold (in grams or fraction thereof) in a vault on the investor’s behalf.
|| “Such digital gold products are different from SEBI-regulated gold products, as they are neither notified as securities nor regulated as commodity derivatives. They operate entirely outside the purview of SEBI,” the market regulator stated in the circular dated November 8, 2025.
Risks Associated With Digital Gold/E-Gold Products
- Counterparty risk: If the platform fails (liquidation, mismanagement or fraud), SEBI will not be able to help, as the product is outsideSEBI’s regulatory ambit.
- Operational risk: Theft, data breaches, or operational lapses that could erase or manipulate ownership
- No grievance redressal mechanism: SEBI and RBI both disclaim responsibility. There’s no formal ombudsman or grievance channel for digital gold buyers.
Where To Invest Then?
SEBI recommends investing in gold via regulated instruments such as
- Gold Exchange‑Traded Funds (ETFs),
- Commodity Derivatives (where applicable), or
- Electronic Gold Receipts (EGRs), all of which fall under SEBI’s supervision.
If you already hold digital gold, especially a large amount,
- Check the platform’s credibility
- Where is the vault located (India or abroad)?
- Is the vaulting partner (e.g., Sequel Logistics, Brink’s) SEBI-registered or RBI-approved?
- Does the provider publish independent audit reports? (Some, like MMTC-PAMP and SafeGold, publish periodic third-party audits online.)
Disclaimer: This news is solely for educational purposes. The securities/investments quoted here are not recommendatory.
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