SEBI Issues Warning on Unregulated Digital Gold Platforms, Flags Tanishq and MMTC

SEBI Warns Investors Against Unregulated Digital Gold Platforms Despite Big Brand Backing

The Securities and Exchange Board of India (SEBI) has issued a strong cautionary advisory for investors, warning that digital gold products offered by online platforms are unregulated and fall outside the protection of securities laws. The latest SEBI warning on digital gold comes as the popularity of online gold investments surges, with platforms like Tanishq, MMTC PAMP, Aditya Birla Capital, and Caratlane promoting small-ticket digital gold purchases as convenient, safe, and affordable ways to invest.

SEBI Sounds the Alarm: Digital Gold Is Outside Regulatory Purview

In a statement released on Saturday, SEBI revealed that it has observed several digital and online platforms offering “Digital Gold” or “E-Gold” investment products, claiming high transparency and low entry points. However, the regulator clarified that these products are not regulated under the securities market framework.

“Digital gold products are neither notified as securities nor regulated as commodity derivatives. They operate entirely outside SEBI’s jurisdiction,” the regulator said.

The SEBI warning on digital gold highlighted that investors purchasing such products are not covered by any investor protection mechanisms available for SEBI-regulated securities or commodities. This exposes them to potential counterparty risks, fraud, or default, as these platforms do not fall under any recognized regulatory framework.

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Growing Investor Interest, But Regulatory Risks Remain

In recent years, digital gold investment platforms have seen exponential growth as more Indians seek fractional ownership in gold. With options starting from as little as ₹10, the model appeals to young and first-time investors who find it easier than buying physical gold.

However, SEBI has cautioned that such unregulated investment avenues pose significant risks, as there is no oversight on how the gold is stored, insured, or audited. In case of disputes or defaults, investors would have no recourse under securities market laws.

Despite the SEBI warning on digital gold, many well-known financial and retail brands continue to promote such offerings.

Big Brands Like Tanishq and MMTC PAMP Among Leading Sellers

Prominent jeweller Tanishq, a Tata Group brand, markets its Tanishq Digital Gold as “a trusted and transparent method to purchase 24K pure gold,” allowing customers to start investing with just ₹100. The company claims that investors can redeem or exchange digital gold anytime through Tanishq.co.in or at over 350 stores nationwide.

Similarly, MMTC PAMP, another major name in the digital gold market, calls itself a leader in online gold trading, highlighting features like instant buying, selling, and redemption. Its platform promotes digital gold investment as “an easy and affordable way to build gold holdings.”

Other platforms such as Aditya Birla Capital, PhonePe, Caratlane, Shriram Finance, and Jos Alukkas have also entered the segment, marketing gold purchases starting at nominal amounts.

While these brands are credible and established, SEBI warned that credibility alone does not equate to investor protection. Even if a reputed firm defaults or faces technical issues, investors will not be able to claim protection under SEBI’s framework.

SEBI’s Regulated Alternatives for Gold Investment

Amid growing concerns over unregulated digital gold, SEBI has reminded investors that it already offers safe and regulated gold investment avenues through recognized financial instruments.

These include:

• Gold Exchange Traded Funds (Gold ETFs) offered by mutual funds

• Exchange-traded commodity derivative contracts

• Electronic Gold Receipts (EGRs) traded on stock exchanges

Such instruments are supervised by SEBI and involve registered intermediaries, ensuring transparency, security, and recourse in case of disputes. Investors in these products also benefit from regulatory safeguards and oversight mechanisms, which are absent in unregulated digital gold schemes.

Why the SEBI Warning on Digital Gold Matters

The SEBI warning on digital gold comes at a time when online gold platforms are spending heavily on advertising, leveraging festive demand and social media trends. By promoting gold purchases as simple and tech-enabled, these platforms have expanded their customer base — but also blurred the line between regulated financial investments and retail commodity purchases.

Experts believe SEBI’s move is aimed at protecting retail investors, many of whom may mistakenly assume these digital gold schemes carry the same level of protection as mutual funds or exchange-traded products.

“Investors need to understand that digital gold is not the same as a SEBI-regulated financial product,” said a Mumbai-based investment advisor. “You may be buying from a big name, but that doesn’t guarantee safety under law.”

Historical Context: Gold Investment Has Always Carried Trust Risk

Traditionally, Indian jewellers offered monthly gold saving schemes — customers paid for 11 months, and the jeweller contributed the 12th installment. These schemes relied heavily on trust and informal agreements. Over time, the government discouraged such unregulated saving models due to risks of mismanagement and default.

Today’s digital gold investment trend is seen as a modern version of these schemes — convenient, but without regulatory backing. SEBI’s cautionary stance highlights the need for regulatory clarity and possibly future oversight mechanisms to protect retail investors in this rapidly growing segment.

Conclusion: Investor Caution Is Key

As digital gold investments gain traction across India, SEBI’s latest statement serves as a timely reminder that not all gold investments are safe or regulated. The SEBI warning on digital gold underscores the importance of due diligence, investor education, and regulatory awareness.

Investors seeking long-term and safe exposure to gold should consider SEBI-regulated options like Gold ETFs or EGRs, rather than relying on unregulated online gold platforms that operate outside the scope of securities law.

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