The Enforcement Directorate (ED) has arrested WinZO co-founders Saumya Singh Rathore and Paavan Nanda in connection with an alleged money laundering case linked to online real-money gaming operations. The arrests mark a significant development in an ongoing investigation into claims of financial irregularities, withheld player funds and violations of the nationwide ban imposed on real-money gaming platforms in August 2025.
ED takes WinZO founders into custody
According to officials, the two founders were detained in Bengaluru on Wednesday after several hours of questioning at the ED’s zonal office. Following their arrest, they were produced before a local court, which granted the agency one-day custody. They are expected to be presented again for further judicial orders.
The ED had earlier conducted searches at the premises of WinZO as well as another gaming company, Gamezkraft, as part of an investigation under the Prevention of Money Laundering Act (PMLA). The probe stems from allegations that online gaming firms continued their operations despite regulatory prohibitions.
Allegations of withheld player funds
The central agency has alleged that WinZO continued running real-money gaming (RMG) operations even after a nationwide ban came into effect on 22 August 2025. The ED claims that nearly ₹43 crore belonging to players was not refunded after the ban, and instead remained withheld on the platform.
Investigators allege that users were made to participate in games run by software-based algorithms rather than competing against real players—a detail that, according to the ED, was not adequately disclosed to customers. The agency claims that the company generated “illegal gains” from players who lost money in these algorithm-driven games.
Cross-border operations under scrutiny
Officials have further alleged that WinZO continued offering identical RMG platforms to users in countries including Brazil, the United States and Germany, while backend operations were entirely managed from India. According to the ED, this structure allowed the company to operate internationally while bypassing certain regulatory checks.
During the course of the raids, authorities reportedly found that around $55 million (approximately ₹490 crore) connected to the company was parked in a US-based shell entity, even though operations and banking were controlled from India. Investigators also suspect that certain funds were diverted to Singapore under the guise of overseas investments.
Assets worth ₹505 crore frozen
As part of the ongoing probe, the ED has frozen assets worth ₹505 crore, including fixed deposits, bonds and mutual funds, connected to WinZO and related entities. Officials stated that the seizures were necessary to prevent the suspected proceeds of crime from being moved or siphoned off.
The agency maintains that the financial trail points towards alleged laundering of funds collected from players who participated in the banned RMG activities.
WinZO denies wrongdoing
In response to the developments, a WinZO spokesperson said the company rejects the allegations and remains “committed to fairness, transparency and user protection.” The platform claims full compliance with applicable laws and has stated that it will continue cooperating fully with investigating authorities.
The spokesperson emphasised that the company supports user interests and insisted that it has followed all legal and regulatory directives.
Conclusion
The arrest of WinZO’s founders marks a crucial phase in the ED’s crackdown on alleged financial misconduct in the online gaming sector. With assets frozen and cross-border transactions under detailed scrutiny, the case is expected to set a precedent for how India handles regulatory violations and money laundering concerns in the booming online gaming industry. The court’s upcoming orders on custody and further investigation will determine the next steps in the high-profile probe.