8,000 Mule Accounts Frozen In J&K As Agencies Bust Digital Terror Funding Network

These accounts, commonly referred to as “mule accounts,” are described by officials as the financial backbone of global cyber fraud syndicates.

Central security agencies have urged J&K Police and other law enforcement bodies to work closely with banks.

Source : PTI

Amid rising security concerns over new channels of terror financing, central intelligence agencies, in coordination with the Jammu and Kashmir Police, have uncovered a major terror funding network that allegedly used local bank accounts to channel funds for militant activities in the Union Territory. The network, which operated through genuine accounts belonging to residents, was exposed after a three-year-long operation.

These accounts, commonly referred to as “mule accounts,” are described by officials as the financial backbone of global cyber fraud syndicates. Investigators fear that a portion of the siphoned money may have been diverted to separatist and anti-national activities in Jammu and Kashmir.

8,000 Accounts Operating In J&K

Over the past three years, authorities have identified and frozen more than 8,000 such accounts operating in J&K, uncovering what they describe as a sophisticated and layered money-laundering ecosystem.

Officials said the latest crackdown follows sustained efforts by agencies such as the National Investigation Agency (NIA) to dismantle terror funding channels in the region. Security officials believe that after the NIA’s 2017 drive to choke traditional funding pipelines, anti-national elements may have shifted to a new model of “digital hawala.”

Under this system, mule account holders, often referred to as “mulers”, earn commissions, which can then be used for illegal purposes while maintaining plausible deniability. Authorities describe mule accounts as the “weakest yet most crucial link” in the cybercrime chain, noting that without them, converting stolen funds into untraceable cryptocurrencies would be nearly impossible.

J&K Police Asked To Act Tough

Central security agencies have urged J&K Police and other law enforcement bodies to work closely with banks to curb the growing number of such accounts and identify intermediaries facilitating fraud.

Investigators say mule account holders are rarely the individuals who contact victims or circulate phishing links. Instead, their role is concealed but critical, they arrange and manage a steady pool of bank accounts used by scammers to receive and layer stolen money while shielding the identity of the actual fraud operators. Often, a single operator may control between 10 and 30 mule accounts at a time.

These accounts typically belong to unsuspecting individuals or willing collaborators lured by promises of easy commissions and minimal risk. They are persuaded to hand over full control of their accounts, including net banking credentials, under the pretext that the accounts will serve as temporary “parking accounts” for transactions.

Accounts Opened In Names Of Shell

In several cases, accounts have been opened in the names of shell or fictitious companies, allowing transactions of up to Rs 40 lakh in a single day without immediately raising red flags.

Officials said the money trail is deliberately obscured by rapidly transferring funds across multiple accounts and breaking them into smaller transactions to evade scrutiny. From there, the funds are often converted into cryptocurrency through private wallets.

A recent assessment by central agencies revealed that handlers based in countries such as China, Malaysia, Myanmar and Cambodia have been directing individuals in Jammu and Kashmir to create private crypto wallets. These wallets are typically set up using Virtual Private Networks (VPNs) to mask location data and bypass Know Your Customer (KYC) norms and identity verification protocols.

With growing concerns over the misuse of digital tools by terror outfits and separatist networks, Jammu and Kashmir Police have already taken steps to suspend the use of VPN services in the Valley, citing their frequent misuse to evade detection.

Officials stressed that even if mule account holders do not design scams or directly interact with victims, they play an active role in enabling money laundering.

“The entire scam ecosystem depends on these accounts. Without a destination for the money, the fraud collapses at the very first step,” a senior officer said.

“Those who rent out their accounts are not mere bystanders; they create the financial infrastructure that sustains transnational crime.”