Dabba Trading Crackdown: ED Raids In Mumbai, Other States; ₹3.3 Crore, Luxury Cars, Jewellery Seized
Mumbai: The Enforcement Directorate (ED) on Tuesday conducted search operations at four locations in Mumbai as part of an ongoing investigation into alleged money laundering linked to illegal high-value dabba trading and online betting, the agency said in an official statement.
During the search operation, the agency seized unaccounted cash amounting to Rs 3.3 crore, along with high-end luxury watches, jewellery, foreign currency, multiple premium vehicles, and cash-counting machines from Mumbai. The operations are being conducted under the Prevention of Money Laundering Act (PMLA), 2002.
Dabba trading refers to an unregulated and illegal form of securities trading that bypasses formal stock exchanges, facilitating covert financial transactions.
The search operation is currently underway in multiple cities, including Mumbai, Delhi, Indore, and Ahmedabad, as officials continue to examine the financial and operational aspects of entities involved in these illegal market activities.
According to the ED, the probe centres around several platforms suspected of facilitating illegal trading and betting activities.
According to the ED official statement, the investigation has uncovered an extensive financial web involving hawala operators, white-label betting platforms, and profit-sharing syndicates. The networks reportedly have offshore connections and have attempted to launder illicit profits through complex financial channels.
The apps under investigation include VMoney, VM Trading, Standard Trades Ltd, IBull Capital, LotusBook, 11 Stars, and GameBetLeague. Many of these platforms operate through mobile apps and web interfaces, including MetaTrader 5, and often function as white-label solutions ,where the core infrastructure is provided by a parent platform, but administrative control is granted to local operators under profit-sharing agreements. This model allows multiple entities to operate betting or trading services under different brand names while using the same backend system.
"Dabba trading" is an illegal and unregulated form of securities trading that bypasses formal stock exchanges, enabling clandestine financial transactions. Most of the implicated platforms do not have official listings on recognized app stores like Google Play or Apple’s App Store. Instead, users access them through websites or by downloading APK files from unofficial sources, raising significant regulatory and cybersecurity concerns. Platforms like VMoney and VM Trading primarily operate through web interfaces or third-party apps without dedicated official applications.
LotusBook, a betting platform predominantly targeting Indian users where gambling apps are restricted, generally operates via mobile websites or through APKs distributed outside official stores, often combined with support via WhatsApp or Telegram for communication, enabling them to evade regulatory scrutiny.
The ED’s probe has uncovered a complex financial network involving hawala operators and offshore syndicates, allegedly used to launder crores of rupees through illegal trading and betting operations. According to the agency, several hawala operators and fund handlers linked to the network have been identified. Digital devices and financial documents seized during the searches are currently under scrutiny, as investigators work to trace the full extent of the money trail.
The case is being investigated under the Prevention of Money Laundering Act (PMLA) and is based on a First Information Report registered at Lasudiya Police Station in Indore. The FIR invoked Sections 319(2) and 318(4) of the Bharatiya Nyaya Sanhita.
The ED’s investigation has revealed that Vishal Agnihotri, the alleged beneficial owner of VMoney and 11 Starss, initially acquired administrative rights to the LotusBook betting platform under a 5% profit-sharing arrangement. Agnihotri later transferred these rights to Dhaval Devraj Jain, retaining a 0.125% profit share while Jain held the remaining 4.875%.
Dhaval Jain, along with his associate John States alias Pandey, developed the white-label betting platform supplied to Agnihotri for operating 11Stars.in.
Additionally, Mayur Padya alias Padya has been identified as a hawala operator responsible for managing cash-based fund transfers and payments to sustain the betting operations.
As Indian financial authorities crack down on illegal trading operations, two terms frequently surface in enforcement reports: dabba trading and grey market trading. While both are outside the regulatory purview and considered illegal.
What Is Dabba Trading?
Also known as bucket trading or box trading, dabba trading involves placing trades in stocks or financial instruments outside formal exchanges such as the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). Crucially, these transactions do not pass through SEBI-registered platforms, meaning they are entirely off the books.
# In these operations, traders take positions in securities without any actual transaction being executed on official exchanges.The entities that facilitate such activity are known as dabba operators.
# Unlike legitimate trades, dabba transactions are typically settled in cash with no formal record-keeping, making them almost impossible to audit or trace. This lack of documentation removes any investor protection or legal recourse. In the event of a loss or fraud, participants have no access to SEBI’s grievance redressal mechanisms.
How Is It Different from Grey Market Trading?
# Dabba trading involves fake or parallel trades in listed securities without any execution on an exchange.
# Grey market trading, on the other hand, often involves real securities, such as pre-IPO shares being traded unofficially before listing.
The grey market is also known as the parallel market because it runs concurrently with the official ecosystem, but without SEBI oversight.