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The stock trade has been one of the most profitable business endeavours but comes with some requirements and regulations. To avoid that, many turn to an off-the-book method called “dabba” trading that hinges on trust and personal relations. A new scam seeks to dupe investors with a digital avatar of this illegal practice.
In an investigation, India Today’s Open-Source Intelligence (OSINT) team found a web of platforms promising to facilitate “dabba” trading – including in black money and luring victims on messaging apps. Many of them have dedicated rookie mobile applications.
One of them is known as ‘Bear & Bull Dabba Trading’. It promises to facilitate investments through its website and Android mobile app that are shared through WhatsApp and Telegram by operators.
The interface of the application mirrors popular trading platforms like Zerodha, a popular online stockbroker.
FORENSIC DETAILS
According to its domain registration details, the site bearbull[.]co was registered just six months ago and the mobile app was not listed on any commercial app distributors like App Store and Play Store.
India Today found bearbull[.]co was hosted on an IP address (148.113.16.91) that also hosts 18 other similar “dabba” trading sites. The interface of these websites – meaning how they look when a user visits them – is astonishingly similar.
Coding details of the websites – that show how all lies in their constructs and how they function – reveal stunning similarities and they all are traced back to cloud service provider Ovhtech R&D (India) Pvt. Ltd.
Some of the sites, like deltatrade[.]site, angelone[.]tech, and nextrade[.]pro impersonate legitimate and established platforms providing services in financial and securities markets.
Domains of all the platforms have been registered after June 2024.
SCAM ALERT
The sites bear all the hallmarks of typical scam campaigns and appear to be trying to dupe potential investors with the widely-prevalent tactic: build legitimacy and earn user trust by providing higher returns on small investments, create hype, encouraging them to put in more money, and shut shops after accumulating substantial money.
In the case of angelone[.]tech, the site links lead users directly to the registration page that provides an auto-generated user ID and asks to fill in a password and a mobile number.
We entered an imaginary phone number that was accepted without any verification. Once logged in, the page shows options to trade in stocks, commodities, futures, and even in cryptocurrency. On the ‘Deposit’ page, it seeks money through UPI ID and a bank account which is registered with a HDFC Bank branch in Navi Mumbai’s Ghansoli.
The platforms appear to be part of an organised network. Many of the sites use the same bank account for users to make deposits and share the same database to store user registration information – meaning the same phone number can’t be used to register with multiple sites on the network.
PROMOTION
The scammers were active on Telegram, Facebook, and WhatsApp through groups and channels to promote the scam. As many as 28,000 users were part of the ‘Bear & Bull Dabba Trading’ group on Telegram. In the group, the admin shared trading details along with a WhatsApp link that opened a chat where the handler advised to start trading at a minimum of Rs 500.
The handler also sent us an APK file for registration and trade.
The scammers also ran sponsored advertisements on Facebook and Instagram to lure victims. One of the ads, now removed, reads: “Make profit today in dabba trading.” It carries a WhatsApp invitation link.
WHAT IS DABBA TRADE?
Dabba trading is no real trade. It is essentially placing bets on stock price movements.
In a typical dabba trading setup, the operator acts like a broker, facilitating transactions between traders and managing the bets placed on stock price fluctuations.
However, instead of executing trades through official channels, the operator keeps track of the trades internally, offering payouts based on the prices they set. The trader places a bet on whether the price of a stock will rise or fall without any actual purchase or sale.
While it avoids regulations and taxes, dabba trading is highly risky. There are no legal safeguards, and traders have no recourse in case of fraud.
In September, the Special Investigation Team (SIT) of Gujarat Police uncovered a dabba trading racket, with transactions worth Rs 27.81 crore.
