FATF 2025 Terrorist Financing Risk Update
Why in the news
The Financial Action Task Force released a 2025 update on terrorist financing risks and highlighted digital tools that help hide fund flows. India featured in its case studies.
Key facts
- Case studies: the Pulwama bomber bought aluminium powder through Amazon; the Gorakhnath attacker used PayPal and VPNs for ISIL-linked financing.
- E-commerce platforms (EPOMs) let terrorists buy dual-use goods quietly, aided by weak monitoring.
- Crypto tools: unregulated markets, mixing services and blockchain wallets; encrypted apps and VPNs evade surveillance.
- Lone actors raise money through crowdfunding, gaming platforms and social media.
- Trade-based methods: under- and over-invoicing on digital storefronts.
Gaps and challenges
- Weak KYC on digital wallets and fintech platforms.
- Poor data localisation policies slow retrieval of digital evidence.
- Cross-border legal complexity, dark web use and lax AML/CTF oversight in some jurisdictions.
FATF recommendations
- Stronger digital KYC for e-wallets, fintech apps and marketplaces.
- Real-time AI surveillance of suspicious behaviour and keyword-triggered purchases.
- Global data sharing treaties and evidence exchange protocols.
- Crypto exchanges to enforce disclosure, monitoring and suspicious transaction reporting.
- Marketplaces to flag risky items and verify sellers.
Exam angle
- Body: FATF; topic: terrorist financing risk.
- Case studies: Pulwama, Gorakhnath.
- Term: EPOMs, dual-use goods.