Overview
- In a November 8 advisory, the market watchdog said digital gold and e‑gold sold on online platforms operate outside SEBI’s purview and are neither securities nor regulated commodity derivatives.
- SEBI warned that buyers face counterparty and operational risks and that securities‑market investor‑protection mechanisms do not apply to these products.
- Investors were directed to SEBI‑regulated options such as exchange‑traded commodity derivatives, Gold ETFs offered by mutual funds, and Electronic Gold Receipts traded on exchanges.
- Experts advised retail investors to review independent audit reports, vault certificates, and custodians for any existing holdings, and they pointed to Gold ETFs and Sovereign Gold Bonds as safer ways to gain exposure.
- Digital gold’s popularity has climbed on low‑minimum, app‑based purchases—reported as small as INR 10—with concerns amplified by opaque practices and a reported INR 1.95 crore cyber theft linked to a digital‑gold app.