November 08, 2025 – Mumbai, India – In a game-changing official warning issued today, the Securities and Exchange Board of India (SEBI) has fired a direct shot at digital gold platforms, declaring them completely unregulated and fraught with “significant risks”. The regulator’s press release (PR No. 70/2025) explicitly states: “Such digital gold products operate entirely outside the purview of SEBI” and offer ZERO investor protection. If you’re holding digital gold on apps your money is at grave risk. Here’s the full breakdown of SEBI’s red flags and why this could wipe out your savings overnight!
SEBI’s Official Verdict: Digital Gold is NOT Regulated – Unlike ETFs & EGRs!
SEBI has made it crystal clear: True safe gold investments are only through SEBI-regulated products like:
- Gold Exchange Traded Funds (ETFs) by Mutual Funds
- Electronic Gold Receipts (EGRs) tradable on stock exchanges
- Exchange-traded commodity derivative contracts
These are bought via SEBI-registered intermediaries and backed by strict regulatory safeguards. But digital gold sold on apps? SEBI says:
“They are neither notified as securities nor regulated as commodity derivatives… They operate entirely outside the purview of SEBI.”
No SEBI. No RBI. No safety net. You’re flying blind!
SEBI Warns: “Significant Counterparty & Operational Risks” – One Failure = Total Collapse
The regulator didn’t mince words:
“Such digital gold products may entail significant risks for investors and may expose investors to counterparty and operational risks.”
Your gold is held by private vault partners. If the app, refiner, or vault company goes bankrupt or shuts down (think crypto crashes), recovery is a legal nightmare – and you have no claim. SEBI confirms: No investor protection mechanisms apply.
Zero Legal Backup: SEBI Says “NONE of the Protections Under Securities Law Apply”
Straight from the press release:
“None of the investor protection mechanisms under securities market purview shall be available for investments in such Digital Gold/E-Gold products.”
Unlike mutual funds or bank FDs with deposit insurance, digital gold leaves you 100% exposed. One platform failure = your entire gold holding could disappear.
Forced 5-Year Exit Trap + Hidden Charges That Drain Your Wealth
Most apps limit storage to just 5 years. After that? Sell or take physical delivery – with extra fees piling up:
- Making/Storage Charges: Hidden in buy price – 2–3% upfront.
- Buy-Sell Spread: 3–6% gap – you lose money just by trading!
- 3% GST: Mandatory, just like physical gold.
- Delivery Fees: Want real gold? Pay making + shipping charges.
- Exit Penalties: Storage expires? More charges to force you out.
SEBI’s warning amplifies this: These platforms market digital gold as a “physical gold alternative” – but it’s a costly illusion.
The Full SEBI Press Release (Key Excerpts) – Read It Before It’s Too Late!
“It has come to the notice of SEBI that some digital/online platforms are offering investors to invest in ‘Digital Gold/E-Gold Products’… In this context, it is informed that such digital gold products are different from SEBI regulated gold products…”
SEBI is urgently cautioning the public: Don’t confuse app-based digital gold with real regulated options.
SEBI’s Safe Alternatives – Where Smart Investors Are Moving NOW
Switch to SEBI-approved gold investments:
- Gold ETFs: Low cost, liquid, no storage hassle.
- Electronic Gold Receipts (EGRs): Trade like stocks on exchanges.
- Sovereign Gold Bonds: Government-backed, with interest!
The Brutal Truth: Digital Gold = High-Risk Private Bet, NOT Investment
SEBI has drawn the line: Digital gold is unregulated, unprotected, and loaded with counterparty traps, hidden spreads, and forced-exit fees. It’s not a safe alternative to physical gold – it’s a private company promise with zero backup.
URGENT ACTION REQUIRED: If you have digital gold, liquidate and move to SEBI-regulated options TODAY. Share this SEBI warning – save a friend from financial disaster!
Source: SEBI Press Release PR No. 70/2025, dated November 08, 2025
Disclaimer: This is educational. Always consult a SEBI-registered advisor.
