ED Provisional Attachment of Property in Codeine-Based Cough Syrup Diversion Case.

Headnote:

The Enforcement Directorate (ED), Bengaluru Zonal Office, conducted search and seizure operations at four locations in Delhi and Gurgaon against M/s WinZO Games Pvt. Ltd., a company engaged in online real-money gaming. The ED froze Proceeds of Crime (POC) worth approximately ₹505 Crore under Section 17(1A) of the PMLA, 2002, including bank balances, bonds, FDRs, and mutual funds. The investigation revealed that the company continued operations of Real Money Games (RMGs) overseas despite a Union Government ban and misused customer KYC data to generate illicit profits through algorithm-driven games.

Background:

1. ED initiated the investigation based on FIRs alleging cheating, account blocking, impersonation, PAN misuse, and customer losses due to fraudulent activities.
2. M/s WinZO Games Pvt. Ltd. operates online RMG services via its WinZO app. Global operations, including hosting RMGs, were undertaken from India even for customers in Brazil, USA, and Germany.
3. Despite the government ban on RMGs (effective 22 August 2025), the company held ₹43 Crore belonging to gamers without refunds.
4. Allegations include use of software algorithms to manipulate games, restricting customer withdrawals, and diverting funds abroad to shell companies like WinZO US Inc.

Court/Authority’s Observations:

1. ED seized and froze POC worth ₹505 Crore under Section 17(1A) PMLA.
2. The frozen assets include bank balances, bonds, FDRs, and mutual funds.
3. The company’s Indian entity diverted funds totaling USD 55 Million (≈₹489.90 Crore) to USA and Singapore under the guise of overseas investments, though operational control remained in India.
4. The ED highlighted that RMG operations were conducted deceptively, with customers unaware they were playing against algorithms rather than humans.
5. Investigation is ongoing, with further actions expected against the company and associated individuals.

Legal Provisions Discussed

1. Section 17(1A), Prevention of Money-Laundering Act, 2002 (PMLA) – Attachment and freezing of Proceeds of Crime.
2. FIR Allegations – Cheating, misuse of PAN, fraudulent blocking of accounts, impersonation, and illegal retention of customer funds.
3. Union Government RMG Ban – Prohibition of real-money gaming operations in India (effective 22/08/2025).

Citation: 2025:ED:BLR:1124

Case: Directorate of Enforcement v. M/s WinZO Games Pvt. Ltd. & Ors.

Court/Authority: Enforcement Directorate (Bengaluru Zonal Office)

Date of Action: 18–22 November 2025

Investigation under: Prevention of Money-Laundering Act, 2002 (PMLA)