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Sebi: Digital Gold Off My Radar, Beware Risks!
21 Nov
Summary
- Sebi confirms digital gold is unregulated and outside its purview.
- Investors face significant counterparty and operational risks.
- No investor protections exist for digital gold investments.
The Securities and Exchange Board of India (Sebi) has issued a clear statement regarding digital gold investments, emphasizing that such products are not under its regulatory purview. Chairman Tuhin Kanta Pandey clarified that Sebi's focus remains strictly on regulated products like gold Exchange Traded Funds (ETFs) and tradable gold securities.
Pandey further elaborated that digital gold operates entirely outside Sebi's established framework. Investors are therefore exposed to substantial risks, including counterparty and operational vulnerabilities. Unlike regulated securities, these digital gold offerings lack the investor protection mechanisms typically available in financial markets.
Sebi advises the public to exercise extreme caution when considering investments in digital gold. The absence of regulatory oversight means there are no guarantees regarding redemption, conversion to physical gold, or transparency concerning the actual gold backing these products, leaving investors with limited recourse.
