The Enforcement Directorate has frozen assets worth ₹192 crore linked to gaming platform WinZO, marking a fresh escalation in the ongoing money-laundering investigation against the company.
The freeze followed search operations conducted on December 30 at the premises of WinZO’s accounting firm, where investigators identified assets classified as proceeds of crime. These assets include bank balances, fixed deposits and mutual fund investments.
Part of a Larger Crackdown on the Gaming Firm
The latest action comes over a month after WinZO co-founders Saumya Singh Rathore and Paavan Nanda were arrested under the Prevention of Money Laundering Act (PMLA). Earlier, in November, the agency had frozen ₹505 crore worth of assets linked to the company, indicating that the probe has been widening in scope rather than narrowing.
Investigators have alleged that WinZO’s real-money gaming operations involved criminal misconduct, including inducing users to place bets without adequately disclosing that games were being played against bots, artificial intelligence systems and algorithms rather than real players.
Allegations of User Fund Restrictions
According to the findings cited in the investigation, WinZO is accused of restricting or selectively allowing withdrawals from user accounts. The agency has also claimed that the company retained ₹43 crore of user funds even after real-money gaming was banned, raising questions over compliance and user protection.
Overseas Fund Movement Under Scrutiny
The probe has also focused on cross-border movement of funds, with allegations that a portion of the proceeds was transferred outside India to the United States and Singapore in the name of overseas investments.
One such transfer under scrutiny involves $54 million allegedly parked in a US bank account held by an entity named WINZO US Inc., which investigators have described as a shell company. The agency has alleged that while the entity was registered overseas, control of operations and banking decisions remained in India.
Court Developments: Bail Split Between Founders
On the legal front, developments have diverged for the two co-founders. Saumya Singh Rathore was granted bail by a Bengaluru sessions court, which observed that under PMLA provisions, women accused are exempt from certain stringent bail conditions.
However, Paavan Nanda was denied bail, keeping him in custody as the investigation continues.
High Court Challenge and Bank Guarantee Proposal
WinZO has challenged the enforcement action before the Karnataka High Court, arguing that the scale of asset freezing is disproportionate to the alleged offence. The company has also sought to have the search and seizure declared illegal and void.
The High Court has directed the agency to consider de-freezing the company’s bank accounts against a bank guarantee of ₹505 crore, while also seeking detailed financial disclosures of WinZO’s Indian and overseas subsidiaries.
Industry Context and Company Background
The enforcement action unfolds against the backdrop of a nationwide ban on real-money gaming imposed in August last year, which forced several platforms to suspend operations and triggered layoffs across the sector.
Founded in 2018 and headquartered in New Delhi, WinZO has raised over $110 million from investors including Kalaari Capital, Makers Fund and Courtside Ventures. Following the gaming ban, the company expanded into the US market and launched a short-video platform named ZO TV.
With multiple asset freezes, overseas fund trails, and parallel court proceedings now underway, the WinZO case is emerging as one of the most consequential enforcement actions against India’s online gaming sector.
The outcome could have lasting implications for regulatory scrutiny, investor confidence and the future structure of real-money gaming platforms in the country.
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