ED arrested WinZO founders on money laundering charges. Rs 43 crore stranded, questions on foreign fund diversion and real-money games. Gamezkraft also under investigation, know what is the whole matter.
New Delhi/Bengaluru: A big news has come out from the online gaming industry. Saumya Singh Rathore and Pawan Nanda, both founders of the famous real-money gaming platform WinZO, have been arrested by the Enforcement Directorate (ED). He has been facing serious allegations like money laundering, not returning Rs 43 crore to the players, fund diversion and algorithm tampering. There have been many such revelations in the initial investigation of ED, which have shaken the entire online gaming sector. After questioning in Bengaluru, both were arrested on Wednesday and produced in the local court, where they were sent to one-day custody. ED is now investigating this entire case in depth.
Did WinZO withhold Rs 43 crore from players?
ED claims that WinZO should have returned approximately Rs 43 crore to its players after the ban on real-money games in India. But this amount remained in ‘hold’ with the company itself, which is against the rules. The investigating agency alleges that this amount was kept wrongly. The agency says that the company made the gamers play with the algorithm without telling them, so that they understand that they are playing with real humans.
Was the ‘fake game’ being run by algorithm?
ED has also accused WinZO of playing against the algorithms and software without informing the players. That is, players thought they were playing against real people, while the system was making them compete against a machine – which itself was controlling the winning-loss pattern.
Was money diverted from India to foreign countries?
ED also claimed that WinZO ran games on foreign platforms such as Brazil, the US and Germany despite the ban in India. ED alleges that crores of rupees were sent to the US and Singapore in the name of foreign investment. Even USD 55 million (about Rs 490 crore) was found deposited in WinZO’s US bank account – which according to the ED is a shell company account.
Is Gamezkraft also trapped in this trap?
Apart from WinZO, ED also raided another gaming company Gamezkraft and its promoters. It is also alleged that his bonds, fixed deposits and mutual funds worth Rs 505 crore have been frozen under PMLA.
Was this entire operation being run from a single app?
ED also came to know that only India’s app was operating across the world. This means that foreign gaming operations were also controlled from India, which further increased the possibility of financial irregularities.
What does WinZO’s side say?
WinZO said that the company runs the platform with fairness and transparency. Their focus is to ensure the safety of users and a safe gaming experience. The company says that it fully follows the rules and transparency and security are the top priority in its platform. WinZO spokesperson said that they will cooperate fully in the investigation. However, as per ED allegations, there were restrictions in withdrawing customers’ money and misuse of software/algorithms. This matter is currently pending in the court and a major update is likely to come in the coming days.