Kanak Coin
KANAK
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Regulatory FAQ

The honest guide to
Digital Gold & Regulation.

Kanak Coin does not sit under the RBI framework — and we think you deserve to know exactly why, who does watch over your gold, and what safeguards are in place. No jargon, no fine print.

MMTC-PAMP Certified
999.9 Purity · LBMA
ISO 27001
Info-Security Standard
Insured Vaults
Brinks + Sequel Logistics
Mandatory Disclosure

Market Volatility & Risk Disclosure

Digital Gold investments are subject to market risks. Gold prices fluctuate continuously based on global commodity movements, US dollar strength, geopolitical events, central-bank policy, seasonal demand and domestic macro conditions. The INR-equivalent value of your Kanak Coin balance can go both up and down.

Your Kanak Coin balance stays constant in grams (24K, 999.9 purity backed 1:1 in insured MMTC-PAMP vaults). The variability sits only in the INR conversion rate at the moment of redemption or sale.

Historical performance does not guarantee future returns. Past gold price movement — whether recent rallies or dips — is not a reliable indicator of forward returns. Please invest only what fits your overall asset allocation and risk appetite.

  • Price risk: intraday and long-term price volatility of the gold spot rate.
  • Liquidity risk: live buy-back rate applies at redemption; large redemptions may settle in tranches.
  • Custodian risk: although vaulted with MMTC-PAMP + insured, digital gold lacks a sovereign guarantee (unlike SGBs).
  • Tax risk: capital-gains tax rules on digital gold may change; consult a qualified tax adviser.
  • Regulatory-evolution risk: if SEBI or a new regulator brings digital gold under a specific licensing regime in future, we will comply and communicate any changes transparently.

This disclosure is provided in the spirit of SEBI/RBI mandatory-disclosure practices for other financial products and does not constitute investment, legal or tax advice. Please consult a qualified adviser before making any decision.

Is Kanak Coin regulated by the RBI?

No. Kanak Coin is a gold-backed loyalty token backed 1:1 by physical 24K gold custody with MMTC-PAMP (via Oropocket). Physical digital gold is not classified as a banking, deposit, or payment-system product under the Reserve Bank of India Act, 1934 or the Payment & Settlement Systems Act, 2007, so it does not fall under RBI's licensing framework.

L4B Labs also operates separate B2B product suites that are governed under their own regulatory frameworks — those are distinct products and legal entities from Kanak Coin.

So which framework actually governs digital gold in India?

Digital gold is currently a self-regulated market. It sits under the broader consumer-protection frameworks (Consumer Protection Act 2019, IT Act 2000, GST rules) rather than a dedicated financial-services regulator.

In 2021, SEBI restricted regulated stockbrokers from offering digital gold on their platforms — that action clarified that digital gold, as sold today, is a commodity purchase & custody arrangement, not a security. Sales of physical bullion custody are supervised by the MMTC-PAMP audit regime and each vault's ISO certification.

How does the Oropocket + MMTC-PAMP custody actually work?

Every time a Kanak Coin is minted, an equivalent gram of 24K (999.9 purity) MMTC-PAMP gold is purchased at that moment and locked into insured vaults managed by Brinks / Sequel Logistics on behalf of Oropocket.

Oropocket publishes a gram-level portfolio balance via its Portfolio API. Our nightly reconciliation cron compares the L4B internal ledger (kanak_ledger collection) against Oropocket's true grams. Any drift beyond 0.5% pages the on-call engineer immediately.

You can redeem Kanak Coins for (a) physical 24K coins/bars via Oropocket's delivery partner, or (b) INR at the live buy-back price shown on the wallet.

What protections do I have as a customer?

1:1 physical backing — every mint triggers a real gold purchase. No fractional-reserve model.

Insured vaulting via Brinks + Sequel Logistics under an all-risk policy covering theft, damage, and transit.

ISO 27001 certified information-security controls on the L4B Labs stack (audit trail available to enterprise clients on request).

AES-256 encryption for wallet keys at rest; TLS 1.3 in transit.

Independent nightly reconciliation between our ledger and MMTC-PAMP's vault position (published every 24h in the /kanak/admin dashboard).

Where can I see the audit reports?

Enterprise & tenant customers can request the latest MMTC-PAMP vault audit + Oropocket SOC-2 attestation via the Data Room. Contact compliance@l4blabs.io for access.

The reconciliation dashboard (/admin/kanak) is available to super_admin and tenant_admin roles inside the L4B Labs portal.

What are the risks I should be aware of?

Price risk: gold is a commodity; its INR value fluctuates daily. Your Kanak Coin balance in grams stays constant, but the INR-equivalent may go up or down.

Custodian risk: while backed by MMTC-PAMP + insured vaults, digital gold does not enjoy sovereign guarantee (unlike Sovereign Gold Bonds, which are RBI-issued).

Regulatory-evolution risk: if SEBI or a new regulator brings digital gold under a specific licensing regime in the future, we will comply and communicate any changes transparently.

Who certifies the gold purity?

All bullion is MMTC-PAMP LBMA-accredited 999.9-purity 24K gold. Every bar / coin is stamped with a unique assay serial that can be verified on MMTC-PAMP's website.

Need more?

Talk to our compliance desk.

Auditors, tenants and enterprise clients can request the latest MMTC-PAMP vault attestation + Oropocket SOC-2 report via the Data Room.

Email Compliance

Statutory Disclaimer: Digital gold custody is powered by Oropocket (MMTC-PAMP partner) and is a self-regulated commodity offering — not a product under the Reserve Bank of India framework. Kanak Coin is a gold-backed loyalty token backed 1:1 by physical 24K gold held in insured, ISO-27001-certified vaults. Kanak Coin is neither a security under the Securities Contracts (Regulation) Act, 1956, nor a deposit under the RBI Act, 1934. This page is provided for informational purposes and does not constitute legal or tax advice — please consult a qualified adviser before making any decision.