From crypto council to terror cash: Pakistan’s digital pivot explained

New Delhi: The raids conducted by the Jammu and Kashmir Police's State Investigation Agency (SIA) last month over terror funding through cryptocurrency was an eye-opener. The searches were carried out to collect evidence that involved cross-border funding through cryptocurrency to fund terror in Jammu and Kashmir.

This is probably the first reported incident of cryptocurrency being used to fund terror activities in India.

The raids did yield results and the SIA recovered electronic devices. It also exposed a secret financial network that was being used to fund terror in Jammu and Kashmir.

"These search operations reflect the State Investigation Agency's unwavering determination to safeguard the sovereignty and integrity of the nation while ensuring the safety and security of the people of the Union Territory of Jammu and Kashmir," the SIA had said in its statement.

This marks a major shift in how terror in India has been funded by Pakistan. Funds for terror are usually raised through illegal donations, narco trade, arms smuggling and counterfeiting. The money would reach terror groups through hawala transaction in most cases.

It was the Hamas back in 2019 that started this trend of raising funds through cryptocurrency donations. After it came to light, the United States seized around 200 websites and 150 cryptocurrency accounts linked to the Hamas.

What the SIA investigation has revealed that Pakistan has set up a mechanism through which it can fund terror activities in India through cryptocurrency. What exactly changed in Pakistan so suddenly considering that it was extremely suspicious of digital currency until sometime back.

A lot changed since March 2025, when Pakistan created the Pakistan Crypto Council and appointed Canadian-Chinese businessman as its adviser. Further an agreement was also signed with World Liberty Financial, a crypto company that is linked with the family of US President Donald Trump.

To the outside world, it looks like Pakistan only intended to attract investments and also build ties with President Trump. However, the worry for India is that this also provides Pakistan a way to fund terror through cryptocurrency. This method allows the funding to remain anonymous.

The earlier forms of funding would provide investigators with a financial trail. Many activities of terrorists have been linked to Pakistan only because the agencies were able to chase the money trail.

Also, in the war against terror choking funding is an important aspect. In the battle against the separatists in Jammu and Kashmir, one of the key aspects that led to their downfall was when their funding was choked and this the agencies were able to do since they were able to chase the trail. (IANS)

Also Read: New Delhi: ED uncovers Rs 600-crore crypto fraud, freezes Rs. 2.18 crore in raids

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