ED raids Gameskraft, WinZO in Bengaluru, Delhi, Gurugram over alleged algorithm rigging, crypto trail

The Enforcement Directorate (ED) raided the offices of online gaming operators Gameskraft and WinZO in Bengaluru, Delhi and Gurugram on November 18, sources told Moneycontrol.

Sources told Moneycontrol that a total of 11 premises were searched, five in Bengaluru, four in Delhi and two in Gurugram. The raids were conducted at the corporate offices of the companies as well as the residences of their top executives.

"FIRs filed by victims alleged that these gaming companies had manipulated the algorithm of the app putting the gamers at disadvantage. The searches also unearthed that Promoters are owning crypto wallets indicating laundering through cryptocurrencies", sources told Moneycontrol.

Moneycontrol has reached out to both the companies for a comment and will update once we hear back.

This move comes months after the government introduced an online gaming law that placed a blanket ban on online money games, where a user makes a deposit, directly or indirectly, with the expectation of earning winnings on that deposit.

Gameskraft and WinZO subsequently discontinued their real-money business in the country.

Gameskraft operated online rummy app Rummyculture. The company is embroiled in a fraud scandal involving its former CFO Ramesh Prabhu who has allegedly siphoned off funds amounting to Rs 270.43 crore over nearly five years. An FIR has been filed against Prabhu at Bengaluru's Marathahalli police station, following Gameskraft's complaint, Moneycontrol reported on September 16.

Meanwhile, WinZO offers over 100 games in 15 Indian languages developed by third-party game developers from around the world on its platform. The company also has presence in the United States and Brazil.