In a significant move, the Enforcement Directorate (ED) has executed a seizure of various financial assets belonging to Winzo Pvt Ltd and its subsidiary, Zo Pvt Ltd, amounting to Rs 590 crore. This enforcement operation is conducted under the Foreign Exchange Management Act (FEMA), 1999. The agency’s actions were confirmed on Thursday, February 19.

Winzo is known for its involvement in the online gaming sector, specifically focusing on Real Money Games (RMG) and gambling. The platform offers a diverse range of over 100 games and claims to serve approximately 250 million users. The ED’s investigation revealed that Winzo has made overseas direct investments in its foreign subsidiaries: Winzo US Inc based in the USA and Winzo SG PTE Ltd located in Singapore. These transactions involved acquiring foreign exchange worth USD 54,255,010, which is equivalent to Rs 492 crore.

Detailed Findings of the ED Investigation

The assets were seized by the ED’s Bengaluru zonal office under Section 37A of FEMA due to violations of Section 4 of the same Act. The investigation disclosed Winzo’s operations of real-money gaming outside India, specifically in countries like Brazil, Germany, and the United States, through its subsidiary Winzo US Inc. The agency stated that Winzo has allegedly funneled funds abroad under the pretense of overseas direct investments, although the essential gaming infrastructure for these activities is reportedly managed and shared from India.

Furthermore, the ED pointed out that the foreign entities associated with Winzo lack independent employment and structures to support their operations. The management and operational control of these overseas subsidiaries, including daily functions, are executed by Indian directors and employees. All pertinent financial records, control over foreign bank accounts, and accounting functions for the US and Singapore entities are managed in India.

Legal Implications and Violations Detected

The ED’s investigations uncovered that Winzo Pvt Ltd has established wholly owned subsidiaries in both the USA and Singapore, which are involved in gambling and real-money gaming activities. Such operations are illegal under Rule 19 (1) (b) of the Foreign Exchange Management (Overseas Investment) Rules, 2022. The ED emphasized that these foreign subsidiaries are engaged in non-Bonafide business activities, which contravene existing laws in India as stated in Rule 9(1) of the FEMA (Overseas Investment) Rules, 2022.

Due to the enactment of the Promotion and Regulation of Online Gaming Act, 2025, online gaming activities have been banned in India. Consequently, Winzo should not have made any overseas investments or sustained previous ones in light of this legal restriction. The ED claims that Winzo has been managing foreign currency and income generated abroad in the bank accounts of its subsidiaries, stemming from these prohibited activities, amounting to Rs 590 crore.

Recent Developments in the Crackdown

The ED’s latest actions follow a previous operation wherein the agency attached a significant balance in foreign bank accounts maintained in the USA and Singapore. This earlier attachment included an amount reaching USD 55.69 million (approximately Rs 505 crore) associated with overseas shell companies linked to the Winzo App case. The ongoing investigation continues to unravel the depth of the alleged irregularities within Winzo’s international operations.

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