Catenaa, Saturday, May 17, 2025- India government has instructed cryptocurrency platforms to tighten surveillance on transactions originating from Jammu and Kashmir and other border regions, following concerns about potential terror financing.
The advisory, issued last week by the Financial Intelligence Unit (FIU-IND), directs exchanges to closely monitor transactions linked to “private wallets” – decentralized tools that facilitate peer-to-peer transfers without oversight. Special attention is to be given to privacy coins like Monero and Zcash, which can obscure transaction trails, potentially aiding illicit activities.
The move comes as India continues to face ongoing security challenges in Jammu and Kashmir, a region that remains a contentious area in the conflict between India and Pakistan. Intelligence agencies have increasingly flagged cryptocurrencies as a potential method for cross-border financial misconduct, including terrorist financing.
“It’s not new,” said Mohith Agadi, founder of decentralized fact-checking system Fact Protocol.
“They usually scrutinize crypto transactions for money laundering and terror financing. When incidents like this happen, they do it even more stringently.”
The directive builds on existing reporting requirements for Suspicious Transaction Reports (STRs), which crypto firms are already obligated to submit. However, this new order asks exchanges to focus specifically on users from border regions, even if no immediate red flags are detected.
Concerns about privacy coins have grown in the wake of several high-profile cases. In one instance, the U.S. Department of Justice recently seized millions of dollars in crypto from terrorist groups, including ISIS and al-Qaeda, following an operation that targeted their fundraising activities via digital platforms.
