NEW DELHI: In another major action against online gaming and betting companies, ED arrested WinZO founders Saumya Singh Rathore and Paavan Nanda late on Wednesday and produced them before a special court in Bengaluru, which remanded them to 10 days of ED custody. The agency has already frozen Rs 500 crore of assets of the company, including bonds, mutual funds and fixed deposits.
According to ED sources, WinZO, which was operating from India despite a ban on all online money gaming and gambling activities, was siphoning off the proceeds of crime to the US and was in the process of shifting base to that country where online gaming is not banned. It was into online money gaming in Brazil, Germany and the US, besides India.
"The directors of the company have systematically diluted their share in the Indian company, and these funds have been transferred to the US-based subsidiary. The total available balance in the foreign accounts of the company is around $55 mn (Rs 490 crore)," agency sources said.
During the hearing on the remand application on Thursday, the ED counsel told the court that "using algorithms, the accused persons had deceived and defeated the players in different online games. Unaware that they were playing with an algorithm and that defeat was certain, the players were losing money".
"Prima facie, it was found during the investigation that Rs 177 crore of proceeds of crime was generated between May 2024 and August this year," the agency said. These illicit gains were then laundered to the US and Singapore through the subsidiaries of WinZo Games, US.
According to ED, four FIRs were registered against the accused persons in Delhi, Bengaluru, Rajasthan and Gurgaon, and the agency later searched premises of the accused, including the offices of WinZo Games in Delhi and residence of Saumya Singh, between Nov 18 and Nov 22.
The agency has also found a balance of Rs 43 crore in WinZo's escrow account, which remains classified as "payable to users" as of date.
"The existence of such a significant pending payable amount is evidence that user wallets were blocked indiscriminately and arbitrarily, preventing legitimate users from accessing or withdrawing their own funds," sources said.
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