ED Arrests WinZO Cofounders In Money Laundering Case

The Enforcement Directorate (ED) has reportedly arrested gaming startup WinZO’s cofounders Saumya Singh Rathore and Paavan Nanda under the sections of the Prevention of Money Laundering Act (PMLA).

The ED summoned the cofounders for interrogation at its Bengaluru zonal office yesterday, ET reported, citing sources. Following the questioning, the agency took them into custody.

Inc42 has reached out to WinZO for comments on the development. The story will be updated on receiving a response.

This comes days after the ED carried out searches at the offices of real money gaming startups GamesKraft and WinZO across Bengaluru, Delhi and Gurugram.

Earlier this week, the ED said it froze WinZO’s alleged proceeds of crime worth INR 505 Cr held in the form of bank balances, bonds, mutual funds, and more. 

“ED investigation revealed that WinZO company is operating real money games in foreign countries such as Brazil, USA and Germany, etc. from India (on the same platform used by the Indian entity). Even after the ban of RMGs by Union Government (w.e.f. 22/08/2025), an amount of INR 43 Cr is still held by the company without refunding to the gamers/ customers,” the ED said in a statement.   

The agency said that WinZO was engaged in criminal activities and unscrupulous practices, with its customers made to play with algorithms/ software without being made aware of the fact that they were playing with software/ algorithms and not with humans in real money games.

“WinZO has also prevented/ limited withdrawals of monies held by the customers in the wallets of WinZO Pvt Ltd… (It) also generated POC in the form of bet amounts placed and lost by real customers through the unscrupulous use of such algorithms/ software which are received by the entity in its bank accounts,” it added.

The agency said that the funds of WinZO’s Indian entity were diverted to the US and Singapore under the garb of overseas investments. Funds worth $55 Mn (about INR 489.90 Cr) were parked in the bank account in the US, held in the name of its US entity. The ED said the US entity was effectively a shell company as all the operations and day-to-day business activities and operations of bank accounts were being carried out from India.  

The ED began investigating the companies on the basis of FIRs filed against WinZO and others, alleging cheating, blocking of accounts, impersonation, and misuse of PAN card.

Notably, the Centre banned all forms of real money gaming in the country in August this year. Following this, the real money gaming sector saw widespread layoffs, with many startups shutting operations and other pivoting to new business models.

Yesterday, it was reported that Flutter Entertainment-owned Junglee Games laid off 350 employees across its Delhi and Bengaluru offices.