Security agencies have flagged a sophisticated “crypto hawala” network that bypasses India’s financial safeguards to funnel untraceable foreign funds into Jammu and Kashmir, raising serious concerns that the money is being used to finance terror activities, officials said on Sunday. ADVERTISEMENTMirroring the traditional hawala system, in which money moves through informal, non-banking channels, the digital version exploits the anonymity of unregulated cryptocurrency. Officials said this allows operators to erase financial trails while injecting funds directly into the domestic economy. This effectively "breaks the financial trail," allowing foreign money to enter the local economy as untraceable cash, the officials said. The officials said the rise of crypto hawala throws a new challenge of off-exchange trading and, by operating in the "grey market," these traders evade the anti-money laundering laws that apply to registered entities.

Source: The Telegraph January 18, 2026 12:27 UTC