Regulating Digital Investments: Investor Risks and the Role of SEBI in India

Purpose This study aims to examine the growing landscape of digital investments in India and critically analyze the role of the Securities and Exchange Board of India in regulating these emerging financial domains. It focuses on identifying key investor risks, particularly those arising from social media-driven financial advice, and evaluates the impact of such trends on investor behaviour and market integrity. Design/Methodology/Approach The research adopts a qualitative and analytical approach based on secondary data sources, including SEBI reports, regulatory frameworks, academic literature, and policy documents. It integrates concepts from behavioral finance to understand investor decision-making patterns and examines recent developments in digital investment platforms and online financial ecosystems. Findings The study finds that while digital investments have enhanced accessibility and participation in financial markets, they have also increased exposure to risks such as misinformation, speculative trading, herd behaviour, and lack of accountability among finfluencers. Although SEBI has implemented several investor protection measures, existing regulations are not fully equipped to address the dynamic and decentralized nature of digital financial content. Implications The findings emphasize the necessity for a more adaptive and comprehensive regulatory framework to protect investors, particularly young and first-time participants. Strengthening disclosure requirements, implementing clearer and stricter guidelines for financial influencers, and promoting investor education and awareness initiatives are crucial for ensuring market stability and sustaining investor confidence. Originality This paper contributes to the existing literature by linking digital investment trends with behavioral finance and regulatory oversight in the Indian context. It provides a contemporary perspective on the challenges posed by finfluencers and offers policy-oriented recommendations for improving regulatory effectiveness.