Karnataka HC ordered release of Gameskraft cofounders Vikas Taneja, Deepak Singh and Prithviraj Singh, declaring their ED arrest illegal
The three cofounders had moved the Karnataka HC challenging their arrest by the ED on May 7 in a money laundering case
The probe was launched on the basis of multiple FIRs filed against the startup for alleged cheating
The Karnataka High Court (HC) has ordered the immediate release of GamesKraft
cofounders Vikas Taneja, Deepak Singh and Prithviraj Singh, calling their arrest by the ED illegal.
“The writ petitions are allowed…and arrests of the petitioners are declared to be contrary to law… In consequence thereof, the petitioners shall be set at liberty forthwith…registry directed to intimate the prison authorities to release the petitioners from jail,” Live Law quoted Justice M Nagaprasanna as saying in an order passed yesterday.
The three cofounders had moved the Karnataka HC challenging their arrest by the ED on May 7 in a money laundering case.
Earlier, a sessions court had sent them to judicial custody till June 2, 2026.
Notably, in January this year, the Karnataka HC stayed the ED’s probe against Gameskraft, observing that the basis of the enforcement case information report (ECIR) no longer existed after a closure report was filed in the predicate offence FIR.
The ED, however, argued that it could update the ECIR if fresh offences emerged during the investigation and accused Gameskraft of manipulating game outcomes and encouraging users to make large deposits.
The probe agency conducted searches between May 7 and May 13 in Bengaluru and Delhi NCR as part of its money laundering probe into Gameskraft.
The probe was launched on the basis of multiple FIRs filed against the startup for alleged cheating. Following the searches, the ED froze assets worth ₹526.49 Cr, seized gold jewellery worth ₹3.5 Cr and recovered ₹11 Lakh in cash.
During court hearings in May, the cofounders argued that their arrest was not based on any fresh evidence and questioned why the ED did not issue summons before arresting them. They also claimed that the arrests were aimed at bypassing an earlier stay order in a similar case.
The ED, however, said the current ECIR was based on three FIRs registered in Telangana.
Founded in 2017, Gameskraft operated gaming platforms such as RummyCulture, RummyPrime, Playship, RummyTime and B2B platform RummyCorner. The startup had nearly 3 Cr users across India.
According to the ED, Gameskraft continued offering services in states such as Telangana, Andhra Pradesh and Tamil Nadu, where online real-money gaming was banned, by allegedly bypassing location restrictions.
The agency also alleged that while Gameskraft charged commissions of 10%-15% on user stakes and claimed its platform was free from bots, users were unknowingly made to play against bots and automated systems.
The ED claimed users were initially attracted through small winnings and easy withdrawals but later suffered losses in higher-stake games where bots were allegedly used. It estimated total user losses at around ₹1,154 Cr.
The agency further alleged that money generated through these activities was routed into foreign investments, dividend payments, mutual funds, bonds and other assets.
Source: Inc42 - Startups
