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Digital gold has been quite a hype in the market for a few years now. In the present world, buying gold is not as tough as it was earlier. It is just as easy as tapping a button on your phone. With digital wallets and online platforms offering “digital gold” in seconds, it feels modern, safe, and convenient — almost like the future of investing.
But hold on, there is a red flag in such purchases! Not any fin-fluencer or someone else, but India’s market regulator has rung an alarm that investors should think twice before buying such digital products.
On November 8, 2025, the Securities and Exchange Board of India (Sebi) cautioned the public about putting money into unregulated digital gold and e-gold products, stressing that these offerings do not have any investor protection safeguards.
Why Is Sebi Warning Investors?
Sebi observed that several digital platforms are marketing digital gold as an attractive alternative to physical gold. However, the regulator clarified that these products are not classified as securities and do not fall under Sebi’s jurisdiction.
“Such digital gold products are different from Sebi-regulated gold products as they are neither notified as securities nor regulated as commodity derivatives. They operate entirely outside the purview of Sebi,” Sebi said in their notice.
This means if anything goes wrong — technical glitches, fraud, or storage issues — investors are on their own. There will not be any SEBI complaint mechanism, any market protection rules or any regulatory safety net.
So, What Exactly Is the Risk?
Sebi warned that digital gold offered by private platforms carries counterparty and operational risks — in simple terms, if the platform fails or does not actually hold the gold it promises, you may lose money.
“None of the investor protection mechanisms under securities market purview shall be available for investments in such Digital Gold/E-Gold products,” Sebi highlighted in its notice.
Also Read: NSE to Launch Pre-Open Session for F&O From December 8, 2025 ––What Traders Must Know
Where Can You make a Safe investment in Gold ?
Sebi says that investors can choose from regulated gold investment options, such as Gold ETFs, Electronic Gold Receipts (EGRs) on stock exchanges, Gold Fund of Funds and Commodity derivative contracts regulated by Sebi.
These come with legal protection, transparency, and regulatory oversight. Investments in Sebi-regulated gold products are governed by the regulatory framework and can be made only through registered intermediaries.
Tax Angle You Shouldn’t Ignore
Moreover, Digital gold purchases may attract GST and Capital gains tax. So, it’s not always as cheap or flexible as it appears. Digital gold may look modern and investor-friendly, but without regulatory protection, it’s risky territory. Sebi’s message is loud and clear: Invest smart, not just fast.
Disclaimer:
This article is for informational purposes only and does not constitute financial or investment advice. Always consult a qualified financial advisor before making investment decisions.
Kangkan Kishor Sharma, an M.A. in Media and Journalism, serves as the Chief Contributor at NestOfNews.com. He contributes regularly, bringing insight, passion, and a deep commitment to delivering stories that truly matter. His work reflects a thoughtful understanding of media, storytelling, and the issues shaping today’s world.