How safe is buying digital gold? Read SEBI's warning.

Beware of Online Gold: Many apps are selling gold without any regulations. SEBI has also issued a warning regarding digital gold. Investors have been advised to choose safer options.

Beware of Online Gold: The craze for buying digital gold on online platforms is growing rapidly, especially among young people. The ability to purchase gold for just Rs. 100 and later convert it into coins or bars has made it popular. However, SEBI has warned investors that rushing into digital gold can be dangerous.

Digital Gold Operating Outside the Regulatory Framework

SEBI has clearly stated that many apps and websites are selling products under the guise of digital gold or e-gold that fall outside the legal framework. They are neither securities nor commodity derivatives. This means that SEBI has no control over them. If a platform suddenly shuts down or funds are lost, investors will have no legal protection.

Comparisons with Gold ETFs and EGRs are incorrect.

Digital gold is often compared to SEBI-regulated products such as Gold ETFs and Electronic Gold Receipts (EGRs). However, SEBI has clarified that there is no connection between them. Gold ETFs and EGRs are fully regulated, where physical gold is kept safe with a custodian and regularly audited.

Where does the real risk lie?

Digital gold platforms claim that the purchased gold is safe in vaults. But there are no laws governing who verifies this, who conducts the audits, and what happens to investors if the company goes bankrupt. This is the biggest risk.

Expert Opinion

According to an India Today report, SEBI investment advisor Abhishek Kumar says that investors should gradually shift their money stuck in digital gold to safer options such as Gold ETFs or EGRs.