ED Cracks Down on AI Gaming Scam: Winzo’s Overseas Assets Worth $55M Frozen
(Judicial Quest News Network)
Bengaluru, February 2026 — In a major enforcement action blending financial crime and technology misuse, the Directorate of Enforcement (ED), Bengaluru Zonal Office, has provisionally attached movable properties worth USD 55.69 million (₹505 crore approx.) held in foreign bank accounts in the USA and Singapore.
These accounts, operated under overseas shell companies Winzo US Inc. and Winzo SG Pte. Ltd., are allegedly controlled by Paavan Nanda and Saumya Singh Rathore, directors of M/s Winzo Pvt. Ltd.
AI, BOTs, and Algorithmic Deception
Investigations revealed that Winzo allegedly deployed BOTs, AI-driven personas, and algorithmic software to simulate real opponents in money-based gaming matches.
Players were misled into believing they were competing against humans, while in reality, they were pitted against automated systems.
This digital manipulation not only skewed gameplay but also restricted withdrawals from user wallets, effectively trapping funds within the ecosystem. By charging a “rake commission” on each BOT-driven match, Winzo systematically converted user deposits into company revenue.
Between FY 2021–22 and FY 2025–26 (up to August 2025), the company is alleged to have generated ₹3,522.05 crore in proceeds of crime through this mechanism.
Enforcement Trail
- Search & Seizure Operations: Conducted at Winzo’s office (Nov 18, 2025), director’s residence, and accounting firm (Dec 30, 2025).
- Evidence: Documents and digital records exposing AI-driven fraud and fund diversion.
- Frozen Assets: So far, ED has frozen properties worth ₹689 crore in India.
- Overseas Diversion: A portion of the proceeds was allegedly siphoned off to the USA and Singapore under the guise of overseas investments.
- Legal Action: A Prosecution Complaint has been filed before the Special Court of PMLA, Bengaluru (Jan 23, 2026).
The Bigger Picture
This case underscores how AI and algorithmic gaming platforms can be weaponized for financial fraud, raising urgent questions about transparency, regulation, and consumer protection in India’s booming digital gaming industry.
With total attached/frozen proceeds now standing at ₹1,194 crore, the ED’s investigation continues, signalling that more revelations may follow in what is shaping up to be one of India’s most high-profile tech-finance crackdowns.
