ED Strikes Hard: ₹505 Crore in Global Assets Frozen in WinZO Money Laundering Probe

New Delhi, India – The Enforcement Directorate (ED) has sent shockwaves through the Indian online gaming sector by freezing assets worth ₹505.47 crore held in foreign bank accounts. The action is part of a high-profile investigation into the gaming platform WinZO under the Prevention of Money Laundering Act (PMLA).

The frozen funds, primarily located in bank accounts in Singapore and Mauritius, are allegedly linked to a complex web of unauthorized cross-border transactions. This move marks one of the largest provisional attachments in the gaming industry to date, highlighting the government’s tightening grip on financial flows within the digital entertainment space.

The Root of the Investigation

The ED’s probe was triggered by multiple First Information Reports (FIRs) filed by state police departments, most notably in Telangana and Delhi. These complaints alleged that several gaming applications were operating as sophisticated fronts for illegal betting and gambling activities.

Investigative agencies suspect that these platforms lured Indian users under the guise of "skill-based gaming," collected massive sums of money, and subsequently laundered the proceeds out of India through a network of shell companies. The ED is specifically looking into potential links with Chinese-controlled entities that may have facilitated these outward remittances.

A Sector Under Scrutiny

The action against WinZO comes at a precarious time for the Indian online gaming industry. The sector has been reeling from the impact of a 28% GST on the full face value of bets, a policy change that many startups claim has severely dented their unit economics.

WinZO, for its part, has consistently defended its business model. The company maintains that it is a legitimate "skill-based" platform and that it operates in full compliance with existing Indian laws. Sources close to the company suggest the current investigation may be a result of a broader "blanket" crackdown on the sector rather than specific evidence of wrongdoing by the platform itself.

The "Foreign Link" and Money Trails

A key focus of the ED’s current operation is the "Provisional Attachment Order" on funds held abroad. By freezing assets in Singapore and Mauritius, the agency aims to prevent the dissipation of funds while the legal process unfolds.

Under the PMLA, the ED must now present its findings to the Adjudicating Authority within 180 days to confirm the freeze. If the authority finds merit in the allegations, the funds could be permanently confiscated by the government.

Industry Implications

This crackdown serves as a stern warning to the startup ecosystem regarding the Foreign Exchange Management Act (FEMA) and money laundering regulations. As India seeks to become a global tech hub, the government is making it clear that digital innovation must go hand-in-hand with strict financial transparency.

"The era of regulatory ambiguity in gaming is over," says a leading financial legal expert. "Whether it is tax compliance or the prevention of money laundering, startups must now ensure their cross-border transactions are beyond reproach