Growing Threat of Digital Terrorism: Insights from FATF’s 2025 Report
Exam Relevance: Internal Security – Terrorism [UPSC (GS-III )]
Source: The Hindu
Why In News:
The Financial Action Task Force (FATF), an international body that monitors money laundering and terror financing, released its 2025 report highlighting how terrorists increasingly use digital platforms—such as online payments, cryptocurrencies, e-commerce, and encrypted apps—to fund and execute attacks. India is cited as a major case study.
Key Highlights from FATF’s 2025 Report
1. Use of Digital Platforms for Terror Financing
- Terrorist groups now rely on e-commerce websites, cryptocurrencies, Virtual Private Networks (VPNs), and financial technology (fintech) platforms to transfer money without being traced.
- Example: The attacker in the Gorakhnath Temple case used PayPal and VPNs to support activities linked to the Islamic State (ISIL).
2. Exploitation of E-Commerce Sites
- Online platforms like Amazon are misused to secretly buy materials like explosives.
- Example: The Pulwama bomber ordered aluminium powder through an e-commerce website to prepare explosives.
3. Cryptocurrencies and Anonymous Transactions
- Digital currencies such as Bitcoin allow money to move across borders without using banks.
- Lack of regulation and use of crypto-mixers (services that make crypto harder to trace) make it difficult for authorities to track funds.
4. Third-Party Payment Services
- Payment gateways route funds through various accounts and countries, hiding the original source and final destination of money.
5. Rise of ‘Lone-Wolf’ Attacks
- Radicalized individuals, acting alone, use crowdfunding platforms, social media, and even gaming apps to raise money and plan attacks independently.
6. Trade-Based Terror Financing
- Some groups misuse trade by under-invoicing or over-invoicing goods online to secretly transfer money.
Geographic and Institutional Risks
- High-Risk Areas: South Asia (including India), West Africa, Sahel region, and the Middle East are major zones of concern.
- Weak Global Regulations: Many countries lack strong laws on Know Your Customer (KYC), Anti-Money Laundering (AML), and Counter-Terror Financing (CTF) for digital platforms.
How Technology Aids Terrorism
| Tool | Misuse |
|---|---|
| E-commerce | Buying explosives and materials secretly |
| Cryptocurrency | Anonymous and untraceable international transactions |
| VPNs & Encrypted Apps | Hide user locations, prevent communication tracking |
| Crowdfunding | Masked as charity or social causes to collect funds for illegal activities |
| Dark Web | Buying arms, drugs, and laundering money while avoiding government tracking |
Key Challenges in Countering Digital Terrorism
- Jurisdictional Barriers: Cross-border transactions make investigation and cooperation difficult.
- Weak KYC Practices: Many platforms do not verify user identities properly, allowing anonymous use.
- Rapid Tech Adaptation: Terror groups adopt new tools faster than regulations can keep up.
- Dark Web Use: Criminals use hidden websites to plan and fund terror activities.
- Data Localisation Issues: Data stored outside India is hard to access due to legal limitations.
FATF’s Recommended Actions
- Stronger KYC Norms:
Mandatory and strict identity checks for users of digital wallets and marketplaces. - Real-Time Tracking:
Use of Artificial Intelligence (AI) and Machine Learning (ML) to detect unusual patterns and suspicious purchases. - International Cooperation:
Establish Mutual Legal Assistance Treaties (MLATs) for quicker data sharing and investigations. - Crypto Regulations:
Require cryptocurrency exchanges to report suspicious transactions and maintain complete transaction logs. - Platform Responsibility:
E-commerce and fintech companies must identify suspicious buyers and prevent sale of materials with potential terror use.
Conclusion:
The FATF 2025 report warns of the growing danger of technology-driven terrorism. India’s experiences—from Gorakhpur to Pulwama—show how terror financing is moving online. Tackling this threat requires stronger regulations, international coordination, and real-time digital intelligence. As digital tools evolve, so must our counter-terror strategies to ensure national and global security.
