A Bengaluru special court has granted the Enforcement Directorate 10-day custody of WinZO co-founders in a money laundering case involving alleged cheating, fund diversion and gaming manipulation. The ED claims the platform generated illegal “proceeds of crime” through deceptive real-money gaming practices.
Bangalore: A special court in Bengaluru has extended the Enforcement Directorate (ED) custody of WinZO co-founders Saumya Singh Rathore and Paavan Nanda by another 10 days in connection with a serious money laundering case linked to the online gaming platform.
The ED has accused WinZO of being involved in illegal activities such as cheating users, manipulating game algorithms, misusing customer data, blocking withdrawals, and diverting large amounts of money.
According to the agency, the platform did not function in a transparent manner and instead caused financial losses to many customers through deceptive practices.
Rathore and Nanda were taken into custody on November 26 after they appeared before the ED in response to summons issued on November 22.
Initially, the Principal City Civil and Sessions Judge M Chandrashekar Reddy sent them to ED custody for one day. On November 27, their custody was further extended by ten days after the ED requested more time for investigation.
ED Special Public Prosecutor Madhu N Rao told the court that the investigation had revealed that substantial illegal money had been generated and that further questioning of the accused was necessary to trace the movement of funds and identify digital assets.
He submitted that these funds are being treated as “proceeds of crime”, and detailed custodial interrogation was essential to uncover the full money trail.
The ED also conducted search operations between November 18 and 22 at four different locations in Delhi and Gurugram, including WinZO’s offices and other related premises.
Following these raids, the agency froze assets worth Rs 505 crore, including bank balances, bonds, fixed deposits and mutual funds, by using its powers under Section 17(1A) of the Prevention of Money Laundering Act (PMLA).
The case was registered after multiple FIRs were filed by users who accused WinZO of cheating and fraud. The complaints claimed that user accounts were blocked without justification, PAN numbers and KYC details were misused, and money was withdrawn fraudulently. Several users also alleged that their accounts were manipulated and that they were made to suffer financial losses due to unfair and misleading practices on the platform.
The ED further stated that WinZO was operating real-money games from India in foreign countries like Brazil, the United States and Germany using the same digital platform.
It also alleged that even after the Union government banned real-money gaming on August 22, the company did not return Rs 43 crore belonging to customers, which was supposed to be refunded.
As per the ED’s findings, users were unknowingly made to play against algorithms instead of real players, and there was no proper disclosure about this practice.
Their withdrawals were also restricted, which strengthened the suspicion of illegal operations. Due to this, the funds collected from users are being treated as “proceeds of crime” under the law.
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The agency also accused the company of diverting funds to overseas entities. In an official press release, the ED stated that USD 55 million, which is around Rs 489.90 crore, was transferred to WinZO US Inc, which the agency has described as a “shell entity”, even though its operations and control were allegedly managed from India.
Advocate Rohan Kothari is appearing on behalf of Saumya Singh Rathore and Paavan Nanda in the ongoing legal proceedings, as the court continues to monitor the investigation and examine the ED’s claims in this high-profile case involving the online gaming industry.
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