Breaking: WinZO moves Karnataka HC, calls ED raids “Illegal and Void” as founders remain in custody

Delhi-based gaming firm WinZO has taken the Enforcement Directorate (ED) to court, filing a writ petition before the Karnataka High Court that challenges the agency’s multi-day search and seizure operations conducted at its Malviya Nagar office. The company has termed the ED’s actions “illegal, void, and without proper justification,” escalating a fast-intensifying legal battle at a time when its operations have come to a standstill.

In its petition, WinZO has sought a declaration that the ED’s search—conducted from November 18 to 22, 2025 at its Eldeco Centre office as part of the probe into ECIR/BGZO/25/2025—was unlawful. The company argues that both the search itself and the panchanama prepared on November 22 lacked the statutory basis required under Section 17 of the Prevention of Money Laundering Act (PMLA), which mandates specific “reasons to believe” before such action is taken.

The plea calls for the court to quash the search and seizure, expunge portions of the panchanama, and set aside all consequential actions, including the ED’s freezing orders dated November 21, 2025 that blocked WinZO’s bank accounts, escrow accounts and other financial instruments.

Read More: “Unexpected Guests” and a WFH order: WinZO Founders’ message to employees hours before arrest

In a significant move that could have broader implications for enforcement actions across sectors, WinZO has asked the High Court to lay down procedural guidelines for how search and seizure operations should be conducted under PMLA to avoid “overreach” by investigative agencies.

The petition also seeks:

A stay on the ED’s freezing orders

Production of the seized CCTV-DVR device for forensic examination

Disclosure of the ED’s recorded “reasons to believe” that justified the search

A stay on the use of the panchanama in ongoing proceedings

WinZO has requested that all further ED actions arising from the challenged search be put on hold until the court decides the matter.

Operations crippled, founders arrested

The legal confrontation comes amid a severe operational shutdown for the widely used real-money gaming platform. Since December 2, WinZO’s app and website have been largely inaccessible, displaying a message that the service is under maintenance due to “technical issues.” Users have taken to social media saying they cannot access deposited funds, raising concerns about the platform’s financial stability.

A company spokesperson attributed the outage to a “server disruption,” adding, “Users’ money is fully safe and protected at all times.”

All free-to-play games, the company’s digital gold offering, and its micro-drama platform also remain unavailable.

The outage follows the arrest of WinZO co-founders Saumya Singh Rathore and Paavan Nanda, who were taken into custody under PMLA after hours of questioning at the ED’s Bengaluru zonal office. Their arrest marks a significant escalation in the agency’s probe into alleged money laundering and fraudulent gaming practices.

The ED has conducted searches at four locations linked to WinZO in Delhi and Gurugram, subsequently freezing assets worth ₹505 crore, including deposits, bonds, FDs and mutual funds, which it has termed “proceeds of crime.”

Investigators allege the company misled users by claiming that its real-money games did not involve bots or automated systems. Evidence found during raids reportedly showed the use of a concealed algorithm—PPP (past performance of player)—to influence match outcomes.

According to officials:

The company failed to prove that PPP relied solely on users’ past gameplay

Players were not informed that they might be matched against algorithm-driven opponents

User gameplay profiles were allegedly used for auto-matches without consent

The ED estimates PPP-linked games generated ~₹177 crore in illicit gains over 14 months, with corresponding losses to genuine players.

The agency has further flagged that WinZO used the same tech infrastructure to run real-money games in Brazil and the United States, raising red flags on cross-border money flows. It has also accused the platform of arbitrarily blocking wallets and withholding withdrawals.

Earlier, the ED alleged that WinZO held ₹43 crore of gamer funds even after the Union government banned real-money gaming from August 22, 2025.

Company denies wrongdoing

WinZO has rejected the allegations, saying: “Fairness and transparency are core to how WinZO designs and operates its platform. Our focus remains on protecting our users and ensuring a secure, trustworthy experience.”

The platform has raised $100 million from global investors including Griffin Gaming Partners, Maker’s Fund, Courtside, and Kalaari Capital, and offers over 100 games in 15 languages.

With its founders in custody and its business frozen, WinZO’s court challenge could become a key test case on the limits of ED’s powers under PMLA—especially for startups and digital platforms facing increasingly aggressive financial scrutiny.

For now, WinZO’s services remain crippled, its customers await clarity on their funds, and the industry watches closely as the Karnataka High Court takes up a pivotal case that pits one of India’s largest gaming platforms against the country’s premier financial crime agency.