Sebi warns against digital gold: How risky is it and should you invest?
Last Update Date: 06-10-2026
Published by India Today
Abhishek Kumar's role: Quoted
Abhishek Kumar explained that SEBI was warning users that digital gold platforms are outside its regulation, leaving no investor protection if one defaults. He pointed to counterparty and operational risks and suggested investors consider shifting holdings to SEBI-regulated gold ETFs or electronic gold receipts.
What Abhishek Kumar said
What was SEBI warning investors about with digital gold?
That the apps and fintech platforms selling digital gold sit outside its regulation, so nobody at SEBI oversees how these firms handle customers' money or the metal said to back each purchase. The practical consequence, as I read it, is that if a platform defaults, its users have none of the investor-protection mechanisms that apply to regulated products. It is a caution rather than a ban, but one worth taking seriously.
What specific risks come with holding digital gold?
Two stand out to me. The first is counterparty risk: the platform may fail to deliver the gold or to honour a redemption when you ask for one. The second is operational risk: whether the gold exists at all and is stored securely, with no regulator checking the vault claims. And because none of these apps is supervised, there is no easy way for an ordinary buyer to tell a well-run platform from a weak one.
Should I move my digital gold holdings somewhere else?
I would take the cue from the regulator and consider shifting to gold products that SEBI does oversee: gold exchange-traded funds, or electronic gold receipts traded on the stock exchanges. Both are regulated by SEBI and bought through registered intermediaries, which is the protection an unregulated app does not give you today. Convenience is real, but for a long-term holding I would not let it outweigh protection.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on money management
After SEBI cautioned investors about digital gold sold through apps and online platforms, the article explains why these products sit outside its oversight. It covers counterparty and storage risks, the lack of investor protection, and how gold ETFs and electronic gold receipts differ as regulated alternatives.
Publisher source
Sebi warns against digital gold: How risky is it and should you invest?