SEBI warns investors against ‘Digital Gold/E-Gold’ products

The Securities and Exchange Board of India (SEBI) has issued a warning to investors about “Digital Gold” or “E-Gold” products available on various online platforms. These products are not regulated by SEBI and are neither classified as securities nor commodity derivatives. Hence, they do not offer the protections that investors usually get in the regulated securities market.

SEBI clarified that regulated gold investment options like Gold ETFs, Electronic Gold Receipts, and exchange-traded commodity derivatives are under its supervision. These are safe avenues accessible only through SEBI-registered intermediaries. In contrast, digital gold schemes offered by some fintech and jewellery platforms fall outside SEBI’s control. This exposes investors to risks such as counterparty default and operational issues, and in such cases, the usual investor protection rules are not applicable.

Many reputed brands—including Tanishq, MMTC-PAMP, Aditya Birla Capital, Caratlane, Jos Alukkas, and PhonePe—have launched digital gold products allowing customers to buy small fractions starting from ₹10 or ₹100. Even though these companies are trusted names, SEBI stresses that investing in such products carries regulatory risk and limited recourse if problems arise.

Investors are advised to distinguish between SEBI-regulated gold investment options and unregulated digital gold products before investing, to avoid unforeseen risks and ensure their investments are protected under securities laws. This caution is particularly important for newcomers drawn to digital gold’s convenience and low entry cost.