Crypto Hawala: A New Frontier in Illegal Fund Transfers

Security agencies have raised alarms over a 'crypto hawala' network that bypasses financial regulations to channel foreign funds into Jammu and Kashmir. Potentially financing terror activities, this network exploits cryptocurrency anonymity, making funds nearly untraceable and undermining efforts by law enforcement to stabilize the region.

Security agencies have flagged a sophisticated 'crypto hawala' network bypassing the country's financial safeguards, channeling untraceable foreign funds into Jammu and Kashmir. This development is raising serious concerns over its potential use to support terror activities, officials disclosed on Sunday.

The security establishment has been put on high alert due to worries that these shadow funds seek to revive separatist activities within the Union Territory. Previously, such activities had been largely neutralized by law enforcement efforts, including crackdowns by police and central agencies.

In a digital twist on the traditional hawala system, this network employs unregulated cryptocurrency to mask financial trails, reinjecting funds into the domestic economy. Despite India's requirement for Virtual Digital Asset Service Providers to register, this network operates outside the law, leveraging a lack of identity verification and VPNs for anonymity.