SEBI Digital Gold Warning

Overview

The Securities and Exchange Board of India (SEBI) has issued a warning to the public about investing in so-called ‘Digital Gold’ or ‘E-Gold’ products. These products are being marketed by various online platforms.

SEBI's Clarification

• SEBI clarified that these offerings are not regulated by them and fall outside its purview.
• Investments in regulated gold products can be made through: 
  1. Exchange traded commodity derivative contracts.
  2. Gold Exchange Traded Funds (ETFs) offered by Mutual Funds.
  3. Electronic Gold Receipts (EGRs) tradeable on stock exchanges.
• These investments must be made via SEBI registered intermediaries and are governed by SEBI’s regulatory framework.

Risks of Digital Gold

• Digital gold products marketed online are not notified as securities or regulated as commodity derivatives.
• SEBI warns of the significant risks involved, including counterparty and operational risks.
• Investors are cautioned that protection mechanisms available under securities market regulations do not apply to digital gold investments.