Sebi Issues Warning About Risks of Investing in Digital Gold
The Securities and Exchange Board of India (Sebi) cautioned investors against engaging in digital or e-gold products due to their lack of regulation and associated risks. Sebi highlighted that these products, labeled as ‘digital gold’ or ‘e-gold,’ are not under its oversight as they are neither classified as securities nor governed as commodity derivatives.
Sebi stressed that these digital gold offerings operate independently from its regulatory scope, posing substantial risks to investors including counterparty and operational risks. The regulator emphasized that the protective measures for investors in regulated securities do not apply to these unregulated digital gold schemes.
Investors were advised to consider Sebi-regulated gold investment options such as Gold Exchange Traded Funds (ETFs) provided by mutual funds, exchange-traded commodity derivative contracts, and Electronic Gold Receipts available for trading on stock exchanges. Sebi assured that investments in these regulated gold products are facilitated through authorized intermediaries and adhere to the regulatory guidelines set by the regulator.