You must be seeing the latest news or your WhatsApp groups, and watching headlines like “ SEBI warns against digital gold” and feeling a little jittery if you own digital gold investment or are thinking of buying digital gold. Then you must know that you don’t need to panic.
Many people have invested in digital gold in the last couple of years as it has become more convenient than ever to buy digital gold.
Even if you want to just buy ₹100 worth of digital gold, you can easily do it with just a single swipe on your phone. As gold being the traditional asset of our culture, many young people have been showing interest in the digital gold investment.
But the SEBI’s latest news has raised a lot of questions like whether digital gold is really unsafe or if not then what is the bigger picture behind the warning?
This article will walk you through what SEBI actually said, why it matters, what the real risks are, and practical next steps, in plain and simple language.
What happened (in one sentence)
On November 8, 2025, SEBI issued a public advisory cautioning investors about “digital gold” or “e-gold” products sold on some online platforms, saying these offerings are not regulated by SEBI and therefore carry risks that investors should understand.
First, what is “digital gold”?
The term digital gold purchase means you can buy small amounts of gold through an app or website. The platform claims it buys and stores actual gold (usually 24K) on your behalf, and you own a digital entitlement — often convertible into physical gold later (sometimes for a fee). It’s marketed as easy, cheap and convenient.
Why SEBI’s warning matters
SEBI’s warning is about regulation and investor protection:
- SEBI said that many digital gold investments being offered online are not notified as securities and therefore fall outside SEBI’s regulatory framework. That means the safeguards that apply to regulated financial products (such as disclosure rules, audits, and grievance mechanisms under SEBI) may not apply here.
- SEBI flagged counterparty and operational risks – for example, whether the gold claimed to be held exists, who actually owns it, whether it’s insured, whether storage and audit records are reliable, and what happens if the platform fails.
In simple words: SEBI didn’t say all digital gold investment is a scam, it said many such products are unregulated, and unregulated products can be risky.
The main risks, explained simply
- No SEBI protection — If you invest in digital gold products that are not regulated by SEBI, you don’t get SEBI’s investor protections (like strict disclosure, periodic reporting, or easy grievance resolution).
- Counterparty risk — The platform or a third party may claim to hold gold for you but if it doesn’t, your money could be at risk.
- Storage and operational scam— Questions like where the gold is stored? Who audits it and how often? Is the gold you are buying under insurance? These questions don’t have clear answers which puts your money at risk.
- Hidden fees and limitations — Sometimes when you convert digital gold to physical gold, you can come across hidden charges or restrictions like minimum redemption weights or making charges.
- Misleading information — Some products may be marketed as “investment” but structured as something else; that affects legal protections.
Are there safer ways to invest in gold?
Yes. SEBI pointed out regulated options where you do get protections:
- Gold ETFs — These are mutual fund schemes that hold physical gold (or related instruments) and are regulated by SEBI. They trade on stock exchanges, are transparent, and have fund houses and custodians you can check.
- Exchange-traded commodity derivatives — If you want to trade gold futures/options, these are regulated under the commodity exchanges. SEBI referenced regulated gold instruments as alternatives.
- Sovereign Gold Bonds (SGBs) — issued by the Government (through RBI), these are government securities denominated in grams of gold. They pay a small fixed interest and are a regulated, non-physical way to gain exposure to gold. (Note: issuance calendars change — check RBI notifications for current availability.)
These regulated options carry their own costs and features (e.g. ETFs have expense ratios; SGBs have fixed tenure), so pick what fits you.
So, should you sell your digital gold immediately?
Not necessarily. Here’s a practical approach:
- Calm check, don’t panic. Not every app is fraudulent. SEBI’s advisory is a caution to verify before you trust.
- Check the platform — Does it clearly state who holds the gold, where it’s stored, whether it’s insured, and whether independent audits are available? Are the audit certificates recent and verifiable?
- Read the terms and conditions — What are the fees to redeem, minimum quantities, delivery timelines, and dispute resolution mechanisms?
- Look for third-party custodians and audits —Platforms that use reputable vault providers and publish regular audit reports are relatively safer than ones that don’t.
- Consider how much exposure you want — If digital gold investment is a small part of your savings and you’ve verified the platform, you may choose to stay. If it’s a large chunk and you’re unsure about transparency, consider shifting some money to SEBI -regulated options like ETFs or SGBs.
Quick checklist before you invest more in digital gold
- Check the product, if it is regulated and if yes, by whom.
- Look for independent audit reports that have proof of where the gold is stored.
- Check out the custodian (vault or warehouse).
- Check if the stored gold is insured or not?
- Give a look at the redemption rules and fees applied on the physical delivery.
If the answers are vague, that’s a red flag.
If you’re already invested: practical next steps
- Gather documents — download invoices, account statements, proof of purchase and any audit certificates.
- Check redemption options — note how quickly and cheaply you can convert to physical gold or sell back.
- Diversify — don’t keep all your gold exposure in one unregulated product. Consider Gold ETFs or SGBs as alternatives.
- File complaints if needed — if you suspect wrongdoing, document everything and escalate to consumer forums or relevant regulators (and check SEBI’s advisory page for updates).
Final Thoughts — Stay smart, stay safe
SEBI’s digital gold advisory isn’t a reason to panic but it is a reminder to stay informed.
The truth is not all digital gold platforms are running a scam, some of them are running a genuine business with SEBI’s regulations in check. But it is also important to remember that many other digital gold platforms cut corners operate outside regulatory boundaries which can put your investment at risk.
If you want to invest in gold, then you should know that there are plenty of SEBI and RBI regulated options like Gold ETFs and Sovereign Gold Bonds — that let you enjoy the benefits of digital gold investment without the stress of putting your money at risk.
So before you buy your next gram of gold with a single swipe, take a pause and think about all these things you’ve just read.
Check the details, ask the right questions and always make sure your investment is protected.
Gold is meant to make you feel secure — not worried.
FAQs- Importance Of Household Finance For Women
Unregulated digital gold products don’t have SEBI’s oversight or investor protection. This means there’s a risk that the platform may not actually hold the gold it claims, could mishandle funds, or may not be insured. If the company shuts down or faces issues, investors may find it hard to recover their money or gold since there’s no formal complaint or recovery process.
SEBI regulates gold-based financial products like Gold Exchange-Traded Funds (ETFs) and Gold Mutual Funds, which are transparent, audited, and backed by physical gold. Another safe option is Sovereign Gold Bonds (SGBs), issued by the Government of India and managed by the RBI. These options offer strong investor protection, regular disclosures, and a clear process for redemption or returns.
Check the platform’s website or app for clear mention of regulation by SEBI or RBI. Verified products will list their registration number, custodian details, and audit reports. If the platform doesn’t mention any regulator, avoids sharing audit information, or uses vague terms like “trusted partner,” it’s likely unregulated. Always verify such claims on official SEBI or RBI websites before investing.
Don’t panic. Start by downloading all invoices and account statements for proof of ownership. Check whether your gold is insured and audited by an independent agency. Review the redemption terms to see how easily you can sell or take delivery. If you feel uncertain, gradually shift some of your holdings to safer, regulated options like Gold ETFs or Sovereign Gold Bonds.
No, SEBI’s alert doesn’t mean digital gold is illegal. It only means that many digital gold products are unregulated, so they don’t come under SEBI’s supervision or investor protection rules. You can still buy and sell digital gold, but you should do so carefully, after checking the platform’s credibility and understanding that you won’t have SEBI’s safety net if something goes wrong.
