The Supreme Court has upheld the Karnataka High Court’s order quashing proceedings against fintech major Razorpay under the Prevention Of Money Laundering Act (PMLA). 

In an order dated February 26, the SC said it was not “inclined to interfere with the impugned order(s) passed by the High Court”, adding that the petitions filed against the order by the Enforcement Directorate (ED) stand dismissed and any pending applications will be disposed of. 

However, the SC also said that the scope of its order was limited to Razorpay and should not be considered as precedent for all others operating in the fintech space. 

The payment gateway startup has been fighting a long drawn battle with the ED over allegations that it facilitated transactions for an NBFC that was operating illegal loan apps. The ED initiated proceedings against Razorpay under Sections 3, 4 and 70 of the PMLA. 

The Karnataka HC in March 2024 quashed the ED’s money laundering case against Razorpay by noting that it was simply operating as an intermediary and had no intention of laundering money. 

The SC’s order came as Razorpay prepares for its IPO. The fintech unicorn has finalised investment bankers for its $700 Mn public listing. It also converted into a public company and reverse flipped to India ahead of going public. 

Now that the ED’s appeal against the Karnataka HC order has been dismissed, it has provided significant relief to the IPO-bound startup.

However, the SC didn’t comment on the specifics of the case, indicating that the same scope might not be applied to other companies in the future, especially payment aggregators who often act as intermediaries and have been facing PLMA proceedings. 

Besides illegal loan apps, the ED is also pursuing money laundering cases against startups operating in the real money gaming (RMG) and cryptocurrency sectors, both of which are not as well regulated. 

Most recently, the regulator has been fighting it out with RMG startup WinZO, whose cofounders were arrested under PMLA provisions last November. Since then, movable assets worth ₹689 Cr have been frozen or attached, with a view that the startup made approximately ₹3,522.05 Cr between FY22 and FY26 (up to August 22, 2025) through illegal means. 

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