The Securities and Exchange Board of India (SEBI) has sounded the alarm for investors, cautioning them against putting their money into unregulated "Digital Gold" or "E-Gold" products being promoted on various online platforms and apps.

In a fresh advisory, the market watchdog clarified that while it allows investment in gold through regulated instruments such as Gold Exchange Traded Funds (ETFs), Electronic Gold Receipts (EGRs), and exchange-traded commodity derivatives, most of the so-called“digital gold” schemes floating online do not come under its regulatory ambit.

The Rising Trend of Digital Gold

Over the past few years, app-based gold investment platforms have gained immense popularity, especially among young investors seeking a hassle-free way to buy fractional amounts of gold. However, SEBI warns that these products-often advertised as convenient and secure-operate outside any regulatory framework, which could leave investors vulnerable.

'Not Securities, Not Regulated'

“These digital gold products are neither notified as securities nor regulated as commodity derivatives,” SEBI said in its statement.“Such offerings may expose investors to significant counterparty and operational risks, with no protection available under the securities market framework.”

This means that if an online platform defaults or misuses investor funds, there would be no formal mechanism for recovery or redressal under SEBI rules.

SEBI's Advice to Investors

To ensure safety and transparency, SEBI urged investors to stick to regulated investment channels such as gold ETFs, EGRs, or products offered by SEBI-registered intermediaries. These, the regulator noted, provide clear ownership records, market-linked pricing, and protection against fraud.

“Investors should exercise utmost caution and verify whether the product they are investing in is regulated by SEBI or any other financial authority,” the advisory added.

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