ED Raids Gameskraft & WinZO Offices Over Alleged Algorithm Manipulation, Crypto-Funded Money Laundering

The Enforcement Directorate (ED) on Tuesday carried out raids at the offices of online gaming platforms Gameskraft and WinZO in Bengaluru, Delhi and Gurugram, Moneycontrol reported.

A total of 11 premises were reportedly searched, five in Bengaluru, four in Delhi, and two in Gurugram including the companies’ corporate offices and the homes of senior executives.

According to FIRs filed by victims, the platforms allegedly manipulated their app algorithms in ways that put players at a disadvantage.

During the searches, investigators also found that promoters were operating crypto wallets, suggesting possible money laundering through cryptocurrencies.

The action comes months after the government introduced an online gaming law that imposed a blanket ban on online money games where users deposit funds, directly or indirectly, with the expectation of earning winnings.

Following this regulatory shift, both Gameskraft and WinZO discontinued their real-money offerings in India.

Gameskraft Bag of Troubles

Gameskraft Technologies which operated the online rummy app RummyCulture has recently laid off more than 400 employees, over half of its roughly 600-person workforce, in a sweeping organisational restructuring driven by regulatory setbacks and internal turmoil.

The downsizing, which initially involved around 120 employees earlier this year, has expanded dramatically, making it one of the most severe cuts in India’s real-money gaming industry.

The upheaval follows a major financial scandal involving the company’s former chief financial officer, Ramesh Prabhu, who allegedly misused over ₹270 crore of company funds for personal equity and derivatives trading over nearly four years.

The issue surfaced on March 5, when the ex-CFO emailed the company admitting that he had diverted funds for personal trading activities and estimated losses exceeding ₹250 crore. A police complaint was subsequently filed, deepening the crisis and contributing to the company’s decision to restructure its operations.

WinZO Feud with Paytm

The National Company Law Tribunal (NCLT) had issued a notice to gaming platform WinZO last week after fintech firm Paytm filed an insolvency plea alleging unpaid dues of around ₹3.6 crore for advertising services.

The petition, submitted by Paytm’s parent company One97 Communications, claims that WinZO failed to settle payments for promoting its gaming products, including poker and rummy, on the Paytm app.