Jar has, however, challenged the FIR and has prayed for its quashing with the Karnataka High Court. Justice M Nagaprasanna, who concluded the hearing of both petitioners and the police department on Saturday (February 21), has posted the case for judgment.
The Deposit Fraud Investigation division officials at the CID are investigating the company on the grounds that the Bengaluru-based startup had been operating without a licence from either the Securities and Exchange Board of India (Sebi) or the Reserve Bank of India (RBI).
The CID sources told ET that they are continuing with the investigation.
“We are fully cooperating with the authorities and have provided all information requested. As the matter is currently sub judice, 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,” a Jar spokesperson said, responding to ET’s queries.
The CID officials are investigating Jar for alleged offences under Section 21(1) and 21(2) of the Banning of Unregulated Deposit Schemes Act, 2019. The sections deal with fraudulent deposit-taking activity by any company and default in repayment of deposits.
The company has also prayed to the Karnataka High Court for a direction to stay all the proceedings arising out of the FIR and a direction to the CID to break open the lock on the registered office and return all items seized by the investigating officials. This includes the unfreezing of bank accounts and the return of electronic devices, precious metals, and others.
Founded in 2021, digital gold savings app Jar has raised around $63 million in equity funding from large investors including Tiger Global Management, Arkam Ventures, Panthera Capital Investments, and others.
The company recorded a total revenue of Rs 2,450 crore and a net loss of Rs 50 crore in FY2025, according to data sourced from Tracxn. Jar processes the funds from customers and invests them in digital gold through its partner systems. The startup offers a regular savings feature where customers can invest a small amount every day through the UPI recurring payments feature, and the amount can go into buying digital gold. Eventually, customers can liquidate the digital gold and enjoy returns on their investments.
The Koramangala police registered the FIR on January 16, and the same was transferred to the CID for investigations.
