In a major crackdown on foreign-registered online gaming companies operating in India, the Enforcement Directorate (ED) has carried out countrywide search-and-seizure operations. The raids, conducted under the provisions of the Foreign Exchange Management Act (FEMA), targeted 25 premises across various states, including Maharashtra. The ED sources revealed that these online gaming companies are registered in small island countries such as Curacao, Malta, and Cyprus. However, they are allegedly linked to Indian bank accounts opened in the names of proxy persons with no actual involvement in the gaming activities. According to an official from the ED, key individuals behind these companies have opened numerous firms in the names of their employees to facilitate layering and remittances totaling approximately ₹4,000 crore. These remittances, collected from the general public through gaming websites, are routed through multiple bank accounts and falsely declared as payments for importing goods and services. Such remittances are prohibited under the provisions of FEMA.
The searches conducted by the ED spanned multiple states, including Maharashtra, Delhi, Gujarat, Madhya Pradesh, and Andhra Pradesh. The premises linked to several hawala operators and associated individuals/entities were targeted. As a result, several incriminating documents, electronic evidence, PAN cards, Aadhar cards, mobile phones used for operating bank accounts, and office stamps were seized. The investigation revealed that the suspects used international virtual mobile numbers and adopted pseudonyms to conceal their identities. They also employed remote-based servers and laptops accessed through remote apps to evade detection by investigative agencies.
During the raids, the ED seized a substantial amount of evidence, including documents and electronic devices proving foreign outward remittances amounting to thousands of crores, as well as ₹19.55 lakh in cash, US$2,695, and 55 bank accounts of firms involved in layering and remitting income generated from online gaming. The frozen bank accounts will help prevent further misuse of funds. This crackdown by the ED serves as a significant step in curbing illegal online gaming activities and exposes the complex modus operandi employed by these companies to evade detection. The agency’s actions send a strong message to those involved in such fraudulent practices and serve to protect the interests of the public.