Is Your Digital Gold Safe After SEBI’s Warning? What Investors Should Know

The Securities and Exchange Board of India (SEBI) has shaken confidence in digital gold once again. The regulator’s latest note has left investors wondering whether their online gold is really as secure as they believed.

A few months ago, buying gold through an app was normal. Housewives, students, and even small traders did it between chai breaks. Now, the SEBI warning has everyone asking one thing: Is digital gold actually safe anymore?

The Securities and Exchange Board of India (SEBI) released a note on 8 November 2025, saying digital gold is not recognised as a security or commodity derivative. That means it does not come under SEBI rules. The statement mentioned risks like fake storage and uncertain redemption. It felt sudden, but maybe it was waiting to happen.

SEBI’s Warning and What Triggered It

The warning arrived right after the Reserve Bank of India’s June 2025 report I'll, which showed loans against gold jewellery had grown 123% in one year. Outstanding loans reached ₹2.77 lakh crore, compared to ₹1.24 lakh crore in June 2024. That’s a huge jump. People clearly trust gold, digital or physical, more than anything else.

Before we look at the numbers, it’s worth noting that SEBI already regulates gold ETFs, EGRs and Sovereign Gold Bonds. Everything else online is outside its reach.
 

The figures speak for themselves. Gold still runs deep in Indian savings culture. But SEBI’s message was clear, not all that shines online is gold-backed.

What Exactly Is Digital Gold?

Digital gold simply means buying small portions of gold online instead of physical bars or coins. The platform promises to store equal physical gold in vaults. But according to SEBI’s 2025 circular, many sellers could not prove that backing.

A 2024 report by India Infoline said India already had 12 crore digital gold accounts, and nearly 9 crore were active. That’s huge, and that’s also the worry.
 

Small investors trusted big names and fancy apps, not real vaults. That’s how easy habits form, and how risk slips in.

Is Digital Gold the Next Crypto? Learn from RBI’s 2021 Lesson Before You Invest

The current concern around digital gold feels like déjà vu for many investors. Something similar happened when the Reserve Bank of India (RBI) warned people about cryptocurrencies back in 2021. Back then too, the idea seemed exciting and convenient, a way to make money fast. But as markets turned volatile, traders faced huge losses and confusion about taxation.

The Securities and Exchange Board of India’s (SEBI) recent warning should serve as a reminder that if an asset is not properly regulated, it carries invisible risks. Convenience does not always mean safety.

Conclusion 

The impact of SEBI’s warning on digital gold investors is already visible. Many users are withdrawing small amounts or switching to ETFs. The risks involved in digital gold investments are now out in the open.

Still, the future of digital gold investment platforms will depend on how fast they align with SEBI regulations on online gold trading. For now, investor safety after SEBI’s digital gold alert means one simple rule, check who owns the vault before you buy.

Some lessons come late, but they do come. That’s how it goes in the market sometimes.
 

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