SEBI deploys AI to monitor social media as 62% of investors trust finfluencers

SEBI AI Tackles Rising Finfluencer Influence

India's Securities and Exchange Board has deployed Project Sudarsan, an AI-powered surveillance system designed to monitor social media for fraudulent investment claims and unsolicited financial advice. The initiative addresses a growing concern revealed in SEBI's latest investor survey, which found that 62% of investors are influenced by finfluencers when making investment decisions1

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. This statistic underscores why SEBI has prioritized technology-based supervision as retail participation surged following the pandemic, particularly in high-risk areas like options trading.

How Project Sudarsan Monitors Digital Activity

Project Sudarsan, which stands for Surveillance of Unauthorized Digital Activity via Real-time Scanner for Anti-fraud, became operational in November 2025 and has already identified over 20,000 instances of fraudulent content on social media platforms2

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. The system uses multimodal AI to analyze speech, visuals, and regional-language content across major platforms including YouTube, Instagram, and Facebook. It scans publicly available videos, messages, images, and advertisements, combining this information with behavioral and regulatory parameters to assign risk scores and generate alerts for further scrutiny2

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The AI as a regulatory tool specifically targets promises of guaranteed investment returns, fake certifications, impersonation of SEBI-regulated entities, and investment advice offered without required registration. SEBI chairman Tuhin Kanta Pandey emphasized that the regulator's approach is calibrated rather than heavy-handed, describing it as "more like a surgeon's knife—identifying problem areas and dealing with them"1

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Sebi R(AI)DAR Adds Another Layer of Protection

Complementing Project Sudarsan, SEBI has rolled out Sebi R(AI)DAR, an AI-enabled platform designed to review advertisements and investor education material issued by asset management companies1

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. This system flags possible violations including missing mandatory disclosures and the promotion of investment products disguised as educational content2

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. The Association of Mutual Funds in India has deployed this system as part of the broader digital surveillance infrastructure.

Together, these tools represent SEBI's shift from manual and complaint-led supervision toward proactive, technology-based monitoring aimed at detecting potentially harmful content before it causes widespread damage. The regulator has already removed more than 1.2 lakh misleading social media posts by unregistered finfluencers using these AI tools1

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Investor Protection Beyond Social Media

SEBI's digital investor protection plan extends beyond monitoring misleading financial advice on social media. The regulator has introduced Validated UPI handles and the SEBI Check facility, allowing investors to verify in real-time whether payments are going to genuine SEBI-registered intermediaries1

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. SEBI has also partnered with Google Play for a verified app label initiative, giving investors a visible signal that stock trading apps belong to genuine SEBI-registered brokers. This tackles the proliferation of fake trading apps, fraudulent payment requests, and impersonation of registered intermediaries.

Transparency Concerns Around Automated Surveillance

While SEBI states that Project Sudarsan only uses publicly available content linked to securities-market fraud and regulatory violations, the annual report leaves critical questions unanswered. The regulator has not disclosed which specific social media platforms the system covers, how long it retains collected data, what safeguards govern risk-scoring algorithms, or what recourse users have if content is wrongly flagged2

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These concerns echo earlier controversies around government surveillance in India. In 2018, the Union government proposed a Social Media Communication Hub to monitor platforms including WhatsApp, Twitter, and Instagram. The Supreme Court observed that such proposals could create a "surveillance state," prompting the government to withdraw the project2

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. A similar 2020 proposal by Broadcast Engineering Consultants India Limited faced challenges from the Internet Freedom Foundation over privacy and free speech concerns.

Unlike those earlier proposals, SEBI has not indicated that Sudarsan monitors private messages or emails. However, the continuous scanning, analysis, and classification of large volumes of public online speech using automated surveillance raises questions about transparency, accuracy, oversight, and data retention policies that remain largely unaddressed in the regulator's current disclosures2

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