SEBI Warns Investors Against Unregulated ‘Digital Gold’ Investments

A public notice alerting investors against digital gold, or e-gold, products offered by several online platforms has been released by the Securities and Exchange Board of India (SEBI). The regulator clarified that although certain gold investment choices fall under its purview, a large number of digital gold products are not under its control and potentially put investors at significant risk.

Sebi stated in its most recent statement, dated November 8, 2025, that it has already made gold investing possible through regulated products such as electronic gold receipts (EGRs), exchange-traded commodity derivative contracts, and gold exchange-traded funds (ETFs).

SEBI Clarifies Such Products are Not Recognised as Securities

In addition, SEBI disclosed that a number of online and digital platforms are selling "digital gold" or "e-gold" items that are promoted as substitutes for real gold. SEBI noted that these instruments are not regulated as commodity derivatives or recognised as securities. They are completely outside of Sebi's jurisdiction. Additionally, according to SEBI, investors may be exposed to "significant risks" from such products, such as counterparty and operational hazards.

The regulator also issued a warning that investments in digital gold or e-gold products would not be covered by any of the investor protection mechanisms offered by the securities market. The circular does not claim that all digital gold platforms are false or dangerous. Instead, it distinguishes between legal and unregulated gold investments. This implies that Sebi's basic protections and investor protection measures will not be applicable to investors whose products fall outside of its purview.

Why SEBI has Issued Such Notification?

The most recent action by SEBI is a recommendation rather than a ban. It has not identified any particular business or platform, nor has it deemed digital gold unlawful. The regulator's advice is simple but crucial: investors should exercise caution when dealing with digital gold products that are outside of its purview since they can be risky.

SEBI-approved products, including gold ETFs or electronic gold receipts, are options for investors seeking regulatory protection. Those who choose private digital gold platforms should confirm if the business is subject to SEBI regulation, sells products that are regulated by SEBI, and has physical gold backing, frequent audits, and transparent storage information.

Investors are reminded by SEBI's notice that they are solely responsible for doing due diligence in unregulated areas. A timely reminder that not all gold investments are created equal is provided by Sebi's warning dated November 8, 2025. Digital gold works in a grey area, whereas regulated products provide obvious protection under securities regulations. Although this does not necessarily imply that it is risky, it does suggest that investors need to be aware of the dangers and exercise caution.