Karnataka’s Crime Investigation Department (CID) searched the premises of wealthtech startup Jar last week for potential violations in terms of its gold storage practices, sources told Inc42.

The investigation department was seeking details about the startup’s gold storage protocols, particularly its custody structure and the security measures in place to safeguard customer assets, sources added.

Commenting on Inc42’s query on the development, Jar said, “We are fully cooperating with the authorities and have provided all information requested. As the matter is currently subjudice, it would not be appropriate for us to comment on specific allegations or details at this stage. We remain confident that the facts will emerge through the due process of law.”

The development comes months after SEBI warned investors about unregulated ‘digital gold’ products. The markets regulator, in a notification, said that several online platforms were promoting digital gold as an alternative to physical gold, even though such products were neither notified as securities nor regulated as commodity derivatives.

The regulator cautioned that the digital gold offerings were outside its jurisdiction and may expose investors to significant counterparty and operational risks.

Notably, Jar operates a mobile-based app which allows users to invest as little as ₹10 in digital gold.

A number of startups like PhonePe, CRED, and Augmont also allow users to invest in digital gold. Dream11’s parent entity Dream Sports also forayed into the segment after being hit by a ban on real money gaming last year.

However, gold security remains a top concern for the markets regulator. Last year, hackers breached Aditya Birla Capital Digital (ABCD) app and siphoned off nearly ₹1.95 Cr worth of digital gold from 435 accounts. Later, the entire amount was recovered.

Founded in 2021 by Nishchay AG and Misbah Ashraf, Jar claims to serve more than 3.5 Cr users across 12,000 pin codes. It uses UPI Autopay to deduct a fixed amount from users’ accounts to add in their savings.

The startup forayed into the D2C jewellery segment under the brand ‘Nek’ in 2024. It offers gold and silver jewellery products, including rings, necklace, earrings, coins, and more, under the platform.

In September last year, Jar said it was profitable in the first two quarters of 2025 (Q4 FY25 and Q1 FY26) on the back of strong business growth. Meanwhile, in FY25, its loss before ESOP expenses declined over 50% to ₹35.3 Cr. The startup had posted a loss of ₹104 Cr in FY24.

Jar has raised over $111 Mn in funding to date from investors like Arkam Ventures, WEH Ventures, Tribe Capital, among others.

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