After exposing the MBBS seat scam to finance terrorists, the State Intelligence Agency (SIA) of the Jammu and Kashmir Police on Wednesday busted a gang using the Bitcoin channel to push dirty money into the Union Territory. This is the first time that SIA has established the use of Cryptocurrency in financing terrorism.

On Wednesday, SIA conducted a series of raids at several locations spread across Jammu and Kashmir.

Based on case No.12/22 U/S 18, 38, 39 UA (P) Act, 120-B, 121,121-A IPC registered in Counter Intelligence (CI) Police Station in Srinagar, searches were conducted at the houses and premises of the suspects at Mendhar and Poonch, in Jammu province, and Baramulla, Kupwara, and Handwara in Kashmir division.

Global regulator for banks red-flags crypto-assets such as Bitcoin
Global regulator for banks red-flags crypto-assets such as BitcoinIANS

According to SIA, the money is being paid for further distribution to terrorist organizations and separatists in Jammu and Kashmir, with the aim of inciting mass violence and terrorist activities in the region.

Terror funding through Bitcoin trade

According to SIA, the case pertains to terror funding through the Bitcoin trade.

"Details that are being investigated at the initial stage include a mastermind in Pakistan who with the active support of Pakistani intelligence agencies and in connivance with terror outfits based in Pakistan has been pumping slush money to their agents in J&K for further distribution among terror groups and secessionists for fueling mass violence and terror activities in J&K", the SIA states.


Although the SIA has established the identity of the Pakistani mastermind, his particulars are being kept confidential because other agents connected with him are not alerted.

The police said the houses searched today include that of Zahida Bano, Ghulam Mujtaba Deedad-both from Kupwara; Tamjeeda Begum of Handwara, Yasir Ahmad Mir of Baramulla, Farooq Ahmad of Gagrian, Mandi Poonch and Imran Chowdhary of Dharana Mendhar.

"Preliminary investigation revealed evidence that the dirty money originating from Pakistan has reached these persons", SIA said.

Terror mentors tried to exploit loopholes in the Bitcoin trade

According to a news agency, the investigation has revealed that the transfer of money has been layered to prevent backward tracing of its origin.

While several accounts in the middle that have been used to layer the money are outside J&K, the effective whitewashing of the Pakistani money has taken place through the exploitation of loopholes in the international bitcoin trade.

During searches, incriminating material, SIM cards, Mobile Phones, and documents, having a bearing on the investigation have been recovered and seized.