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FATF’s latest report warns of the growing misuse of online platforms and state-sponsored channels for funding terror, citing India’s Pulwama and Gorakhnath cases.
Terrorism has evolved. Once dependent on clandestine couriers and hawala networks, terror financing is now entering living rooms through laptops and smartphones. In a new report titled 'Comprehensive Update on Terrorist Financing Risks' released on Tuesday, the Financial Action Task Force (FATF) sounded the alarm on how terrorist groups are exploiting everyday tools like e-commerce platforms, online marketplaces, and fintech services to fund, plan and execute attacks.
What makes this report particularly significant is that, for the first time, the global watchdog has cited specific Indian incidents—including the 2019 Pulwama suicide bombing and the 2022 Gorakhnath Temple attack—as case studies demonstrating how digital platforms have been misused by terrorists.
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Pulwama Attack: The E-commerce Connection
The suicide attack in Pulwama, which claimed the lives of 40 CRPF personnel, remains one of the deadliest terror strikes on Indian soil in recent memory. According to FATF, the plotters sourced a key ingredient—aluminum powder—used to enhance the IED's impact via Amazon’s e-commerce platform, highlighting how seamlessly terror networks are blending into online commerce ecosystems.
"EPOMs can be used for fund-moving purpose inspired by trade-based money laundering schemes. Traded goods can indeed offer disguise to value being transferred from an accomplice to another member of the network. In such scheme, the first actor would purchase items, send them to his accomplice through an EPOM, for the latter to sell items in another jurisdiction and use profit to finance terrorism," the FATF noted.
Investigators Uncover Complex Trail of Foreign Involvement
Following the Pulwama attack, Indian authorities charged 19 individuals, including seven foreign nationals, under the Unlawful Activities (Prevention) Act (UAPA). Among them was the suicide bomber himself. Investigations led to the recovery of several moveable and immovable assets, including vehicles and terrorist hideouts, linking the plot to wider logistical and financial networks.
Indian officials have repeatedly alleged that Pakistan provides not only ideological and logistical support to such terror outfits but also a safe haven to internationally designated terrorists. The FATF did not name Pakistan directly but flagged the disturbing trend of state sponsorship of terrorism.
"Delegations reported on this trend by referring to the use of state sponsorship for TF (terror financing) either as fundraising technique or as part of the financial management strategy of the certain organisations engaging in terrorist acts. Several forms of support have been reported, including direct financial support, logistical and material support, or the provision of training," it said.
Gorakhnath Temple Attack: A Digital Lone Wolf Operation
The report doesn’t stop at large-scale terror plots. It also points to lone wolf attackers exploiting online payment services and VPNs to fund ideologically motivated violence. One such case is the 2022 Gorakhnath Temple breach in Uttar Pradesh, where an individual influenced by Islamic State in Iraq and the Levant (ISIL) ideology attacked security personnel with lethal intent.
A detailed financial investigation has revealed that the accused transferred approximately Rs 6.69 lakh (USD 7,685) to foreign recipients in support of the ISIL, using PayPal and international third-party transactions. To mask his digital footprint, he reportedly used VPN services, with payments for the VPN made directly from his bank account.
Authorities found that the accused had conducted 44 separate international transactions via PayPal, with a total value of Rs 6,69,841 (USD 7,736). These transactions were carried out over time and directed to foreign accounts allegedly linked to ISIL supporters.
In addition to the funds he sent, the investigation also found that the accused had received Rs 10,323.35 (USD 188) from a foreign account through PayPal. The email records linked to his PayPal activity played a key role in tracing the flow of funds and uncovering the broader network.
Further scrutiny revealed that the money was sent to multiple individuals overseas who have since been identified as known ISIL followers. Investigators believe the funds were used to support terrorist activities abroad, making this a case of serious cross-border terror financing.
"Due to the suspicious nature of these transactions and the potential for TF, PayPal suspended the accused's account, thereby preventing further illicit fund transfers," FATF noted.
When Payment Platforms Become Weapons
The FATF report paints a bleak picture of how far terror financiers have come in adapting to the digital world. The shift from traditional banking channels to payment apps, cryptocurrency, and peer-to-peer (P2P) systems is not just about convenience—it’s about anonymity and speed.
"As the offer of online payment services from Fintech companies grew substantially over the last 10 years, cases of terrorists opting for those services can be observed across all contexts, especially as it offers an opportunity to diversify fund-moving channels," it stated.
The report elaborates that fintech apps are often chosen because they allow transfers via pseudonyms or fake accounts, and offer lower traceability than traditional wire transfers.
"These payment services also appear attractive for terrorist organisations for the low-cost and fast money transfer solutions they offer, with possibility for enhanced opacity on initiators and beneficiaries through pseudonyms or fake accounts," FATF explained.
Merchandise Sales, Crowdfunding, and Pseudonym Payments
It’s not just weapons and materials. Extremist groups are now selling books, music, and even clothes—items that subtly push their ideologies—to supporters through online channels. This practice is particularly common among Ethnically or Racially Motivated Terrorism (EoRMT) groups, the report noted.
"Such online payment services can also be used to convey donations to larger organisations, especially in the extent that some payment mechanisms are directly integrated into social networks and content hosting services. In those cases, a single platform can be used to recruit donators, launch a crowdfunding campaign, and proceed to the transfer of funds through an online payment service," FATF warned.
"As it was mentioned regarding credit cards, online payment services offer less traceability and transparency compared to wire-transfer, making it harder to clearly identify initiators and recipients of transfers," it added.
India’s Growing Concerns and Global Ramifications
India has long maintained that Pakistan’s support for terrorism extends to financial, logistical, and ideological domains. The FATF’s inclusion of Indian cases such as Pulwama and Gorakhnath in its latest global risk assessment appears to vindicate India’s concerns and underlines the urgency of international collaboration to tackle evolving threats.
In June, following the deadly Pahalgam terror attack in Jammu & Kashmir, where 26 people were killed, FATF had condemned the act and stressed that it would not have been possible without financial support. The latest report is part of the comprehensive follow-up FATF promised at the time.
