ED Freezes ₹192 Cr in WinZO Case: Inside the Escalating Probe That Has Rocked India’s Gaming Startup Ecosystem

What began as a fast-growing story of India’s booming real-money gaming industry has now turned into one of the most closely watched enforcement actions in the country’s startup landscape.

On January 2, the Enforcement Directorate (ED) announced that it has frozen assets worth ₹192 crore linked to gaming startup WinZO, intensifying a money laundering probe that has already resulted in arrests, multiple asset freezes, and serious allegations against the company’s operations.

The latest development comes amid heightened scrutiny of real-money gaming platforms in India, following a nationwide ban and growing regulatory concerns around consumer protection, financial transparency, and cross-border fund flows.

The Winzo Story: What the ED Has Frozen — And How

In an official statement, the ED said it carried out search operations on December 30, 2025, at the office premises of WinZO’s accounting firm. During the searches, the agency froze what it described as “proceeds of crime” amounting to ₹192 crore.

These assets, according to the ED, were held in the form of bank balances, fixed deposit receipts, and mutual fund investments.

This action adds to the agency’s earlier move in November 2025, when it froze assets worth ₹505 crore linked to WinZO, marking one of the largest enforcement actions against a gaming startup in India.

Arrests Under PMLA and Serious Allegations

The current freeze follows the arrest of WinZO cofounders Singh Rathore and Paavan Nanda under provisions of the Prevention of Money Laundering Act (PMLA) in November last year.

As part of its investigation, the ED has alleged that WinZO, which operated real-money gaming platforms, was involved in criminal activities. According to the agency, users were allegedly lured into betting and playing games without being informed that they were competing against bots, artificial intelligence systems, and algorithm-driven players, rather than real human opponents.

The ED has further alleged that the company restricted or allowed only limited withdrawals from customer accounts, and continued to hold user funds amounting to ₹43 crore even after real-money gaming was banned in India.

Search and seizure operations were also conducted earlier at WinZO’s office premises and the residential properties of its directors on November 18, as the probe expanded.

Alleged Overseas Fund Transfers Under Scanner

One of the most serious charges levelled by the ED relates to cross-border movement of funds.

The agency has accused WinZO of diverting a portion of the alleged proceeds of crime outside India, routing funds to the United States and Singapore under the guise of overseas investments.

According to the ED, $54 million has been parked in a US bank account held in the name of “WINZO US Inc.” The agency described the US entity as a shell company, stating that all operational control, day-to-day business activities, and bank account management were allegedly conducted from India.

This allegation has significantly raised the stakes of the investigation, placing international transactions and corporate structuring under closer regulatory examination.

Bail for Cofounder Rathore, Relief Denied to Nanda

Amid the enforcement action, there has been partial legal relief for WinZO’s leadership.

According to a report by Bar and Bench, WinZO cofounder Singh Rathore was granted bail by a Bengaluru sessions court a few days ago. The court held that Rathore was entitled to the benefit of provisions under the PMLA, which exclude accused women from the ambit of stringent bail conditions.

However, the court refused to grant bail to Paavan Nanda, meaning one of the company’s cofounders remains in custody as the investigation continues.

WinZO Challenges ED Action in Karnataka High Court

WinZO has contested the ED’s actions in court.

In a separate petition filed before the Karnataka High Court, the company argued that the amount frozen by the ED was disproportionate to the alleged offence. WinZO also urged the court to declare the search and seizure operations illegal and void.

Following these submissions, the Karnataka High Court reportedly directed the ED to consider a proposal to de-freeze WinZO’s bank accounts, subject to the company furnishing a bank guarantee worth ₹505 crore.

The court has also sought detailed disclosures of financials and operational details relating to WinZO’s subsidiaries and associated entities, both within India and overseas, underscoring the depth of scrutiny the case has now entered.

Context: Real-Money Gaming Ban and Industry Fallout

The case against WinZO unfolds against the backdrop of a blanket ban on real-money gaming imposed by the Centre in August last year.

The ban forced platforms such as WinZO, Dream11, MPL, and others to suspend their real-money gaming offerings in India, triggering widespread disruption across the sector. Several gaming startups responded with mass layoffs, shutting down products, or reworking their core business models to survive the regulatory shift.

In the aftermath of the ban, WinZO pivoted its strategy. The company expanded into the US market, aiming to take its gaming technology global, and also forayed into short-form video content with the launch of ZO TV.

A Startup Once Backed by Top Investors

Founded in 2018, WinZO was once among India’s most prominent gaming startups. The company has raised over $110 million in funding from well-known investors including Kalaari Capital, Courtside Ventures, and Makers Fund, reflecting the confidence global venture capital once placed in India’s gaming opportunity.

Today, however, WinZO finds itself at the centre of one of the most consequential enforcement cases in the Indian startup ecosystem, one that could shape regulatory, compliance, and governance expectations for gaming and consumer-tech companies going forward.

As the legal battle continues in court and the ED probe deepens, the outcome of the WinZO case is likely to have far-reaching implications—not just for the company, but for the future of gaming startups operating in India’s increasingly regulated digital economy.