WinZO challenges ED's raid, asset freeze in Karnataka HC
What's the story
Real-money gaming platform WinZO has filed a writ petition with the Karnataka High Court, challenging the Enforcement Directorate's (ED) search and seizure operations at its office. The raids were conducted between November 18 and November 22. In its petition, WinZO has sought to have the ED's actions declared "illegal" and is also seeking a stay on the agency's order to freeze its assets.
Legal actions
ED's investigation led to arrests and asset freezes
The writ petition comes after the ED arrested WinZO's co-founders, Saumya Singh Rathore and Paavan Nanda, on money laundering charges. The arrests followed searches at four WinZO offices in Delhi and Gurugram last month. During these raids, the agency froze assets worth ₹505 crore in bank balances, bonds, fixed deposits, and mutual funds under Section 17 (1A) of the Prevention of Money Laundering Act (PMLA).
Allegations
Investigation revealed alleged fraudulent activities
The ED launched its investigation after FIRs were filed against WinZO for cheating, blocking of accounts, impersonation, and misuse of PAN. The complainants also alleged that their KYC details were misused and they suffered huge losses due to "fraudulent activities" and "cheating" by WinZO. On November 24, the agency said its probe found that WinZO engaged in "criminal activities and unscrupulous practices."
Global operations
WinZO accused of restricting withdrawals, operating globally
The ED also alleged that WinZO restricted or barred withdrawals of money in customer wallets. The agency said ₹43 crore is still lying with the firm without being refunded to players, even after a ban on real-money games since August 22. The investigation found WinZO was running real-money games in Brazil, US and Germany from India using the same platform as its Indian entity.
Financial scrutiny
WinZO's US bank account under scrutiny
The ED flagged a US bank account in the name of WinZO US Inc, which it termed a shell company. The agency said $55 million (₹489.90 crore) has been parked in this account since all the operations, day-to-day activities and bank account management are done from India. This revelation could potentially intensify the scrutiny on WinZO's financial operations and international business dealings.
Company statement
WinZO's response to ED's allegations and current status
The company's mobile app and website are currently "under maintenance due to a technical issue," leaving users unable to access these platforms. A company spokesperson recently told Moneycontrol that a server disruption is causing the outage, adding that the users' money remains fully safe and protected at all times.