04 January,2026 07:41 AM IST | Mumbai | Anish Patil
Dabba trading has taken on a sophisticated avatar, with apps that simulate stock markets but are, in fact, manipulated by racketeers. Representational pic/iStock
Dabba trading racketeers are thinking completely out of the box. No longer is it a crude operation in which money changes hands in some backroom; recent Enforcement Directorate (ED) investigations have blown the lid off a pan-India dabba trading and online betting syndicate functioning in a technologically sophisticated ecosystem involving fake trading platforms, betting applications, encrypted communication and cross-border money laundering.
On December 22, the ED filed a prosecution complaint before the PMLA court in Indore against a syndicate operating across Mumbai, Ahmedabad, Chennai, Indore, and Dubai. A betting FIR registered at NM Joshi Marg police station in Mumbai 2021 proved crucial in uncovering this high-tech racket that mirrors the stock market - but operates entirely outside the law.
"The investigation in the Indore case revealed that the owner of multiple illegal trading and betting platforms had initially acquired administrative control of an underground betting platform under a profit-sharing arrangement," said an officer from the ED, "These administrative rights were later transferred to another operator, with profits being split between them. The probe further found that a white-label betting platform was developed and supplied to run illegal betting websites, while cash transfers and payments were routed through hawala channels."
The proceeds of crime are then parked in land, gold, luxury watches, jewellery, and cryptocurrency holdings. Or, they are transferred to Dubai via hawala. With technology lowering barriers and enforcement playing catch-up, authorities warn that dabba trading poses not just a financial risk to individuals but also a systemic threat to market integrity. The ED's probe aims to trace money trails, identify beneficiaries and dismantle the infrastructure that allows fake markets to flourish alongside India's regulated financial system.
Investigators pointed out that dabba trading has continuously adapted to evade law enforcement. Earlier, trades were recorded manually in notebooks or diaries. This later shifted to laptops and spreadsheets. Today, syndicates allegedly operate through dedicated applications and trading interfaces that mimic legitimate platforms.
The ED has claimed that in the current case, manipulated MT5 servers (trading platforms) were used to generate false trading outcomes. This meant the trading application was sophisticated enough to look like the real thing.
Cash and valuables seized during raids in Mumbai
Clients were allegedly shown simulated trades and fabricated profits on platforms such as "V Money" and "8Stock Height", even though these platforms had no linkage to recognised stock exchanges. The trading outcomes were controlled by the operators, ensuring that losses and gains could be engineered.
Access to such applications is tightly controlled. IDs and passwords are not shared freely, and new users are often introduced through guarantors. Once logged in, a person can allegedly carry out dabba trading from anywhere in the world, while money is settled through cash, hawala routes or, in some cases, cryptocurrency.
It refers to illegal trading in shares and stock market indices where transactions are not routed through recognised stock exchanges such as the NSE or BSE. Instead, bets are placed on the rise or fall of share prices, with settlements done in cash or through informal channels. These transactions are recorded privately in an operator's ledger, in a closed loop or "box" - hence the moniker. With transactions of thousands of crores, the tax loss to the exchequer is enormous.
Parallel to dabba trading, the same racketeers are also running illegal betting platforms as a major revenue stream. In the ED's case, betting websites such as LotusBook247 and 11Starss are allegedly operated through anonymous user accounts, encrypted messaging apps and cash-based settlements. Investigators claim that proceeds from both dabba trading and betting were layered through mule bank accounts and routed to offshore entities, including Dubai-based structures.
Mumbai has repeatedly surfaced as a major hub for dabba trading. In 2021, Crime Branch Unit 7 busted a racket operating out of the Parksite area in Ghatkopar, where multiple accused were found betting on NSE and BSE indices. Data analysed by exchange officials showed turnovers running into several thousand crores within a few months.
More recently, police uncovered app-based dabba trading operations in areas such as Kandivli, where trading was conducted through unlicensed applications like "Moodi", entirely in cash. In one such case, investigators found transactions worth over Rs 4,600 crore and alleged tax evasion of nearly Rs 2 crore.
Nishant Salunkhe, cyber forensic expert
>> "The syndicate operates in a closed loop, with no live connectivity to recognised stock exchanges. But the technologically advanced system creates an illusion of legitimate market activity.
>> Manipulated MT5 server configurations are used to override core parameters such as price feeds, order execution logic, slippage, and profit/loss calculations, allowing operators to pre-decide trade outcomes.
>> Fake trading apps like V Money and 8 Stock Height functioned as visual simulators, not trading platforms, displaying scripted profits to psychologically condition victims into investing more.
>> Funds are laundered through mule accounts, crypto wallets, offshore entities, and layered cross-border transfers, obscuring the audit trail.
>> Because the entire system can be manipulated, there is a hidden risk. Backend dashboards allow real-time manual control to inflate balances, delay withdrawals, or trigger artificial losses once higher dabba trading deposits are made. Withdrawal blocks are enforced through algorithmic flags, followed by demands for "unlock fees", taxes, or loan repayments - classic extraction stages of financial fraud."
Dhwani has Rs 500 in white money, and Rs 500 in black money
>> Dhwani buys XYZ stocks for Rs 500 in white money on an official stock exchange (NSE/BSE)
>> At the same time, she sells the XYZ stocks on dabba trading (black money) for Rs 500
>> If the stock price rises: Dhwani will make a profit on the NSE/BSE purchase. On the other hand, Dhwani's sale will technically make a loss (selling at lower than market rate). But in dabba trading, even this loss results in that Rs 500 black money being converted to white money. It's a win-win scenario!
>> If the stock price falls: Dhwani will make a loss in the official transaction (buying at higher price than market rate), but that loss is offset by the black money profit parked in dabba trades
Rs 404 cr
Alleged proceeds of crime, as per ED
60 kg
Amount of gold and silver seized
Rs 34 cr
Value of assets attached in the case
