A new sophisticated ‘crypto hawala’ network, mirroring the traditional hawala system, is reportedly being used to funnel funds to support terrorist activities in Jammu and Kashmir, Indian security officials warn on Sunday.
According to the Press Trust of India, the shadow foreign funds bypass the financial safeguards, operating entirely off the grid.
The syndicates lure these account holders with a promise of commissions, assuring them that their role is safe and is merely to park funds. They then handle the bank accounts and passwords of all mule account holders. “This effectively ‘breaks the financial trail,’ allowing foreign money to enter the local economy as untraceable cash,” officials said.
The network uses “mule accounts” to temporarily park funds. These accounts layer transactions to obscure the money trail. Further, the syndicates behind the network pay a commission of 0.8 to 1.8 per cent per transaction for such account holders who are generally ordinary people, the officials added.
