SEBI digital gold warning: The Securities and Exchange Board of India (SEBI) has released a public advisory cautioning investors about engaging with 'Digital Gold' or 'E-Gold' products available on various online platforms. The market regulator emphasized that these products are not under SEBI's regulation and are completely beyond its jurisdiction.
In an advisory called 'Caution to the Public Regarding Transactions in Digital Gold', SEBI mentioned, “SEBI has enabled investments in gold and gold related instruments through various SEBI regulated gold products. 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.”
It further noted that investments in these regulated gold products can be made only “through SEBI registered intermediaries and are governed by the regulatory framework prescribed by SEBI.”
SEBI has cautioned investors about unregulated "Digital Gold" or ‘E-Gold’ products being promoted by “some digital/online platforms as alternatives to physical gold. The regulator clarified key concerns in its latest advisory:
SEBI notified that “such digital gold products are different from SEBI regulated gold products as they are neither notified as securities nor regulated as commodity derivatives.”
SEBI warned that such offerings operate entirely outside its regulatory purview, urging investors to exercise caution.
SEBI has cautioned investors about the risks of investing in unregulated ‘Digital Gold’ or ‘E-Gold’ products. The regulator said such instruments may expose buyers to counterparty and operational risks, and investor protection mechanisms under securities laws do not apply to these products.
"It further reminded investors that “none of the investor protection mechanisms under securities market purview shall be available for investments in such Digital Gold/E-Gold products.”