'Mule accounts' used in global scams, anti-national activities, uncovered
What's the story
Central security agencies have uncovered a massive network of "mule accounts" in Jammu and Kashmir, which serve as the financial backbone for global scam networks. Over 8,000 such accounts have been identified and frozen over three years, according to a report by PTI. Officials fear that the funds routed through these accounts could be misused for separatist and anti-national activities.
Role explained
Mule accounts crucial link in cybercrime chain
Mule accounts are described as the "weakest yet most crucial link" in the cybercrime chain. They are essential for converting stolen money into untraceable cryptocurrency. The Jammu and Kashmir Police and other law enforcement agencies have been asked to consult with banks to curb the proliferation of these accounts and identify middlemen, or "mulers," who facilitate financial frauds.
Money laundering
Anti-national elements may have shifted to new model
Officials suspect that after a 2017 crackdown by the National Investigation Agency, anti-national elements may have shifted to a new model of "digital hawala." In this model, commissions earned by mule account holders or mulers are possibly used for activities against the country. However, a muler is not usually the one who contacts victims or sends fake links.
Scheme details
Mule accounts often belong to ordinary people
These mule accounts often belong to ordinary people who are lured with promises of "easy commission" and minimal risk. They are persuaded to hand over full control of their bank accounts under the pretext that these accounts will be used briefly as "parking accounts." A single scammer is usually supplied with 10-30 mule accounts at a time, enabling large transactions without immediately raising alarms.
Facilitation role
Mule account holders are active facilitators of money laundering
While mule account holders may not design scams or speak to victims, they are active facilitators of money laundering. By sharing credentials and accepting commissions, they provide the "financial infrastructure" for transnational crime. A senior official said, "Those renting out their accounts are not just victims of circumstance; they are the engines of the crime."
International connections
People in China, Malaysia directing individuals in Jammu and Kashmir
A detailed study has found people in China, Malaysia, Myanmar, and Cambodia directing individuals in Jammu and Kashmir to create private crypto wallets using Virtual Private Networks (VPNs). These wallets require no KYC or identity verification. The Jammu and Kashmir Police have suspended the use of VPNs as they are a handy tool for terrorists and separatists to avoid detection.