Sebi warning triggers surge in withdrawals from digital gold fintechs

Following Sebi's warning that digital gold lies outside its regulatory scope, fintechs are facing scrutiny over vault practices, investor safety, and KYC compliance

Fintech platforms offering digital gold have seen nearly a threefold surge in user withdrawals after the Securities and Exchange Board of India (Sebi) last week cautioned the public against dealing in such products, according to industry sources. Many also acknowledged that the advisory has put players in a bind.

 

In a statement on November 8, Sebi said digital gold products were outside the purview of the markets regulator. This meant regulators could not inspect fintech platforms’ physical vaults to verify the presence and purity of the gold, as these entities operated outside regulatory oversight.

 

“Platform users now have clarity that