Market watchdog SEBI (Securities and Exchange Board of India) has issued a public caution about investing in digital gold products offered by various online platforms. SEBI in its circular clarified that while it regulates certain gold investment options like Gold Exchange Traded Funds (ETFs), Gold Commodity Derivatives, and Electronic Gold Receipts (EGRs), these digital gold products do not fall under its regulatory limit because they are not classified as securities or commodity derivatives.
Digital gold is marketed as a modern substitute for physical gold but is different from SEBI-approved products. SEBI-regulated gold investments are only available through registered intermediaries and provide the benefit of official investor protection mechanisms. However, digital gold platforms operate outside the oversight of SEBI and may expose investors to higher risks such as counterparty issues and operational failures.
SEBI’s notification highlights that if investors opt for digital gold, none of the protections that apply to regulated market securities are available. This means people risk losing their investment without recourse under securities market regulations if the platform fails or mismanages funds. SEBI urges the public to understand these risks before investing and to prefer regulated options for safer investments.
