Pahalgam Attack Fallout: FIU Report Exposes Crypto’s Dark Role
In the aftermath of the Pahalgam Attack, India's top security and intelligence agencies have intensified efforts to eliminate terrorism at its roots. In a shocking development, the Financial Intelligence Unit (FIU-IND) has submitted a report to the Indian government highlighting alarming links between cryptocurrencies and terror funding.
The report lists several suspicious transactions of virtual digital assets (VDAs) and crypto exchanges, purportedly used for terror funding, separatist operations, cybercrime, drug trade, illegal betting, and online gambling.
FIU Report: Key Revelations
The FIU's "Operational Analysis" of suspicious transaction reports (STRs) finds:
- Widespread use of crypto assets for terror funding and other illicit activities
- VPNs employed to open fictitious accounts on Indian crypto exchanges
- Mass-scale money laundering activities through crypto exchanges linked with foreign and unhosted wallets
- Direct association with Pakistan, a nation embarking on increasing crypto usage while reportedly financing terrorism
- In light of the Pahalgam Attack, the revelations become all the more important, given that India's war against terror is intensifying.
What the FIU Report Implies
The revelations of FIU provide conclusive proof of the link between terror financing and crypto assets. This further reinforces the need for strict crypto regulations in India.
The report also forwards data to key agencies such as ED, CBI, and the Income Tax Department for taking necessary action.
RBI's Warning on Crypto Risks
The Reserve Bank of India (RBI) has consistently cautioned that private cryptocurrencies have a serious threat to India's macroeconomic and financial stability. Based on these new revelations, the RBI could be forced to revisit and further strengthen its crypto-related policies.
Former RBI Governor Shaktikanta Das has been a vocal supporter of banning cryptocurrencies in India entirely, pointing to national security threats.
Suspicious Activities in Sensitive Areas
The FIU report states that criminals in high-risk areas are employing crypto, hawala channels, and online games for illicit purposes. It also points towards the activities of unregistered virtual asset service providers (VASPs) and prohibited crypto exchanges.
Pump-and-Dump Schemes and Bogus Tokens
The FIU also brings to the forefront the surge of pump-and-dump scams in the form of fake cryptocurrencies, which entrap investors and lead to enormous financial losses. Illicit forex apps and persons involved in these schemes have also been linked.
Cryptocurrencies in the Crosshairs
Bitcoin, Tron, and Stablecoins such as USDT (TRC-20) are specifically marked in the report as the most used tokens for terror financing and illegal operations due to their global use and price stability.
Also Read: Why TreasureFun.xyz Is Trending After Treasure NFT’s Rebranding
Conclusion
The Pahalgam Attack jolted not just India but the world. As India intensifies its anti-terrorism campaign, the FIU's findings on crypto's involvement in terror financing add a new dimension of worry.
In 2023, the Central Economic Intelligence Bureau (CEIB) had also suggested the setting up of a special crypto regulator. Now, it is yet to be seen what firm steps the government and financial institutions take to check this emerging threat.
