A SPECIAL COURT in Bengaluru has extended the Enforcement Directorate (ED) custody of WinZO co-founders Saumya Singh Rathore and Paavan Nanda by 10 days in connection with an ongoing money laundering investigation.
The case centres on allegations of cheating, algorithm manipulation, misuse of customer data and diversion of funds. Rathore and Nanda were arrested on 26 November after appearing before the ED in response to a summons issued on 22 November.
Following their arrest, Principal City Civil and Sessions Judge M Chandrashekar Reddy initially remanded them to one day of ED custody. On 27 November, the court granted a further 10-day extension. Advocate Rohan Kothari appeared on behalf of the accused.
The extension came after ED Special Public Prosecutor Madhu N Rao argued that substantial proceeds of crime were involved and that further custodial interrogation was necessary to trace fund flows and digital assets.
Between 18 and 22 November, ED carried out search operations at four locations in Delhi and Gurugram, including WinZO’s offices and associated premises. The agency subsequently froze assets worth Rs 505 crore including bank balances, bonds, fixed deposits and mutual funds under Section 17(1A) of the Prevention of Money Laundering Act (PMLA).
The money laundering investigation stems from multiple FIRs alleging cheating, blocking of user accounts, impersonation, misuse of PAN details and fraudulent withdrawals. Complainants claimed their KYC credentials were misused and that they suffered losses due to deceptive practices attributed to WinZO and other parties.
According to the ED, WinZO operated real-money games (RMGs) in foreign markets such as Brazil, United States and Germany using the same platform from India. Even after the Union government banned RMGs on 22 August, the company allegedly failed to refund Rs 43 crore owed to customers.
The ED further alleges that users were unknowingly matched against algorithms rather than real opponents and that withdrawals were restricted. As a result, funds collected from players are being treated as “proceeds of crime”.
The agency has also accused the company of diverting funds to overseas entities. In its press release, the ED stated that USD 55 million was transferred to WinZO US Inc, described by the agency as a shell entity, with operations and control allegedly exercised from India.
