SEBI Warns Investors about Digital-Gold Investments

• 10 Nov 2025
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The market regulator, Securities and Exchange Board of India (SEBI), has warned the investors about investing in digital gold/e-gold products via online platforms since these products are not government-permitted securities and therefore, do not fall under SEBI’s regulatory purview.

This warning comes at a time when global gold prices are approaching all-time highs and leading to a surge in buying of gold in the country. SEBI also stated that if any investor experiences issues, the investor protection mechanisms currently available under its regulations will not apply to those investing in e-gold or digital gold products.

In contrast, SEBI stated that it has enabled investments in gold and gold-related instruments via several regulated gold products. As per a release, “These are exchange traded commodity derivative contracts, gold exchange traded funds (ETFs) offered by mutual funds and electronic gold receipts (EGRS) tradeable on stock exchanges. Investments in these SEBI-regulated gold products can be made through SEBI registered intermediaries and are governed by the regulatory framework prescribed by SEBI."

SEBI has taken note of e-gold and digital gold products being sold by numerous entities as an alternative to physical gold. "In this context, it is informed that 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," according to the release.

Further, the release mentioned, "Such digital gold products may entail significant risks for investors and may expose investors to counterparty and operational risks." SEBI also stated that investors in such instruments should note that none of the investor protection mechanisms under securities market purview will be available for investments in such digital gold/e-gold products.

Some of the biggest names in the jewellery sector are selling digital gold products, including a PSU in a joint venture with a Swiss company, some online jewellers and e-commerce platforms. To purchase digital gold, a buyer needs to log in to the seller's website. They can invest as little as Rs 100 in digital gold. Upon purchase of the digital gold, the seller provides a receipt that details the amount invested and the weight of the gold acquired by the investor. 

When necessary, the buyer can present the receipt to either receive cash equivalent to the value of the gold held or exchange it for gold jewelry depending on the options provided by the seller.

Source: Times of India