The Karnataka High Court on Tuesday quashed the arrest of online gaming company Gameskraft founders Deepak Singh, Vikas Taneja and Prithviraj Singh by the Enforcement Directorate (ED), terming it illegal, and ordered their release from judicial custody.
Justice M. Nagaprasanna held that the arrests were against the law and ordered the release of the founders. “Writ petitions are allowed to be filed. The detention of these petitioners is declared to be against the law. As a result, the petitioners will be released forthwith. The Registry is directed to inform the prison authorities to enable the release of these petitioners. (The petition) is allowed keeping in mind the observations made,” it said.
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The court reserved its orders on June 8 on petitions filed by the three founders seeking quashing of three Enforcement Case Information Reports (ECIRs) arising out of predicate offenses registered in Telangana between January and February this year.
The ECIRs were registered after the Karnataka High Court stayed an earlier money laundering investigation against Gameskraft on January 22, 2026. At that time, the court noted that a closure report had been filed in the Bengaluru FIR which constituted the predicate offense of the earlier ECIR, effectively “removing its basis”.
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Two days later, a fresh FIR was registered in Telangana alleging that a player suffered losses on the company’s online rummy platform. This was followed by two more FIRs. The CEO then registered a fresh ECIR based on the Telangana cases and arrested the founders on May 7.
The petitioners claimed that the agency relied largely on the same materials that formed the basis of the previous ECIR. However, the CEO confirmed that the new case was based on new material uncovered during the investigation.
” $Rs 187 crore has been transferred through Gameskraft.
While appearing before the CEO, Additional Solicitor General SV Raju said the agency had uncovered material new material during the investigation. He stressed that the proceeds of crime are worth $187 crore has been transferred through Gameskraft” and that the associated entities have made “direct investments abroad worth approx. $100 crores.” Raju said further investigations required the continued detention of the accused.
Senior advocate S Muralidhar, who appeared for Deepak Singh, argued that the ED had failed to comply with the requirements of Section 19 of the Prevention of Money Laundering Act (PMLA), which governs arrest powers. He had confirmed that the inspection conducted on May 7 and 8 did not yield the materials that formed the basis of the arrests. Muralidhar also said that the reasons for the arrest were based on material already available to the agency and not on evidence collected during the search operation.
A detailed order is awaited from the Supreme Court.
