The Securities and Exchange Board of India (SEBI) has warned investors about the growing risks of “digital gold” or e-gold products sold online. These products operate outside the securities regulatory framework and expose buyers to counterparty and operational risks.
SEBI explained that digital gold is often marketed as an alternative to physical gold. However, it is not classified as a security or regulated as a commodity derivative. Since SEBI’s investor protection rules do not cover such investments, buyers face higher risks.
Many online platforms and jewellers promote digital gold with entry points as low as ₹10 or ₹100. They highlight features such as anytime buy/sell and easy conversion to jewellery. These claims may mislead small investors into believing the products are safe.
SEBI urged investors to choose regulated gold investment options. These include exchange-traded funds (ETFs), commodity derivatives, and electronic gold receipts. Such instruments are offered through SEBI-registered intermediaries and ensure investor protection.
According to the World Gold Council, India’s gold ETFs attracted record inflows of $850 million in October — the highest yearly total ever.
