Imagine coming across a trader who seems really confident and promising. They show you charts and data, claiming you can double or even triple your investment in no time.
To make it even more enticing, they talk about huge returns by using massive leverage, sometimes as high as 500x!
All they ask for is a small brokerage fee and no verification.
Sounds tempting, right? But should you really trust them? The truth is, falling for such offers can land you in serious legal trouble.
Most likely, they’re trying to lure you into dabba trading. Let’s take a closer look at what dabba trading is so you don’t get caught in their trap.”
Dabba Trading App
As the name suggests, “dabba” trading represents trading on pen and paper. There is no regulation, no obligation, and no commitment. But when it comes to settlement, the traders will settle based on the commitments made on the dabba or ledger.
In case of loss, you have to pay the amount without any concession.
On the other hand, if they promise you a high return, there is no commitment to offer you that.
Sounds risky?
That’s because it is.
While pen and paper have mostly been replaced by apps, websites, and other platforms, the core risks of dabba trading, unregulated trades, lack of protection, and potential legal trouble remain unchanged.
Let’s learn more about it!
How Dabba Trading Works?
There are certain ways through which dabba traders work. Sometimes it is difficult for any naïve investor to distinguish dabba trading from regular trading. Here are the key factors you need to know.
- Dabba traders do not operate through stock exchanges. They have their own trading ecosystem. So, if you ask them the names of the stocks where your money will be invested, you will not get any genuine answer.
- They will promise you a very high return. They can also ask for more money, claiming a platform fee, financial urgency and more. All these transactions can be illegal and baseless. There will not be any legal documents to guarantee those claims.
- Moreover, settling any profit or loss will be based on the internal ledger. SEBI will not have any rule to play there.
When there are a lot of avenues to multiply your income by following all the rules and regulations, why would you put yourself under legal radar?
Is Dabba Trading Legal in India?
Yes! Dabba trading is illegal in India.
SEBI has outlined certain norms which can convict the people engaged in Dabba trading for 10 years imprisonment and INR 25 crore fine.
So, let’s sum up why it is an illegal practice.
- The trading is not regulated by SEBI.
- It takes place outside the official stock exchange.
- The advisors are not SEBI-registered research analysts.
- It does not abide by the legal settlement process.
If you think police can’t trace such trading, you have to see the snapshot from NDTV below.
As per the article, an unregistered group was practising dabba trading using a name such as “Close Friend Traders” and “Dabba Trading MCX”.
The group was operating it through an online trading platform.
The report also mentioned that, in case of any fraud, the investors will not get any access to:
- Grievance redressal
- Dispute resolution and
- Compensation.
So, be careful with whom you are dealing. News related to such fraudsters is increasingly surfacing in the media lately.
Dabba Trading Complaints
Well, there are many victims of Dabba trading. The traders have become successful in deceiving many through fake promises and misrepresentations lately. Here are two recent case scenarios to understand the way the dabba traders are looting lakhs and crores.
Case 1: Victim lost ₹64 Lakh in Dabba Trading Scam
A group of dabba traders approached the victim on WhatsApp, showing him a trading app and convincing him to invest INR 50,000.
They promised a quick return of INR 8,000 within a few hours.
Soon after, the traders enticed him to invest more, promising profits of over ₹1 crore. Over the course of a month, the victim ended up investing a total of ₹64 lakh, but never received any returns.
Instead, the traders began threatening him and demanding even more money.
Case 2: ₹943 Crore Dabba Trading Racked Exposed
Figure 3: News Report on Dabba Trading – 3
According to reports, the dabba traders operated their trading and online betting schemes under the guise of Sunrise Developers, a real estate company. The main accused—the company’s owner—had already been convicted in other scam cases.
They used illegal software to generate IDs and passwords for investors, but all records of black money were still maintained on pen and paper. After his arrest, he simply destroyed these records to cover his tracks.
Do you really want to trade like this? If you do, there’s a very real risk of becoming a victim and losing everything.
Dabba Trading Recovery
We helped one victim of dabba trading successfully recover their entire investment. Here’s the complete case of recovery:
The investor was lured by promises of high returns and saw initial profits in the app.
When they attempted to withdraw funds, the dabba operator refused and asked for additional payments.
Unlike most victims, this individual kept detailed records of all transactions and reached out to us.
We helped him in filing complaints with the local police and cybercrime departments.
Through persistence and proper documentation, the case was resolved in his favour, and he received a 100% refund.
Here is the snapshot of the first instalment.
While such recoveries are rare, this case highlights that taking prompt action and maintaining evidence can make all the difference.
How to Identify Dabba Trading App?
To ensure that you trade legally, look out for these red flags of dabba trading.
- High Leverage: Investing a small amount will earn you a high return in a short period. Similarly, you can also make a high loss, a loss more than the money you have invested.
- No SEBI Registration: The traders do not have any SEBI registration certificate.
- Zero Paperwork: No official documents are shared. Everything is mostly done on pen and paper.
- Cash Transactions: Transactions involving high amounts are done through cash.
- Zero Transparency: Information related to platform ownership, company registration, and other details is either not available or not shared.
How to Report Dabba Trading?
Have you lost your savings to a dabba trader? Do you suspect that your trader can possibly be a dabba trader? If they do not pass through the red flags, follow the steps below to take legal action.
- Contact your bank to stop any transactions with the trader.
- File a cyber crime complaint in the National Reporting portal.
- Lodge an FIR at the nearest cybercrime cell with all the proofs you have.
- File a complaint to SEBI through email.
Need Help?
If you have lost your funds in any such fraud, then register with us now. We have helped many victims get maximum recovery.
There is still hope to recover your losses. So register with us now!
Conclusion
If you are at a crossroads of recovering your money from dabba traders, approach us to get the job done. Our expertise and assistance will take away the burdens and hassles of burying you. So, let’s fight together to achieve the best solution legally.
