Security agencies in Jammu and Kashmir have identified and frozen over 8,000 “mule accounts” in the past three years as part of a crackdown against cyber scams and money laundering to finance anti-national activities. Officials said these mule accounts are the financial backbone of global scam networks and could fund separatist and anti-national activities. These accounts are the “weakest yet most crucial link” in the cybercrime chain, they added, noting that without them, stolen money could not be converted into untraceable cryptocurrency.
Central security agencies have asked the Jammu and Kashmir Police and other law enforcement bodies to coordinate with banks to curb mule accounts and identify middlemen called “mulers” who facilitate these frauds.
After the National Investigation Agency’s 2017 crackdown on illicit money flows into the region, anti-national elements may have shifted to a “digital hawala” model, where commissions earned by mule account holders could be used for activities against the country.
A muler does not contact victims or send fraudulent links but only arranges and maintains a steady supply of mule accounts for scammers. The mule account holders are persuaded to give full control of their bank accounts, including their net banking credentials. Accounts are often opened in the names of fictitious companies, enabling large transactions of up to Rs 40 lakh in a day without raising alarms.
The funds are quickly shifted across multiple accounts and broken into smaller transactions to avoid detection and make the money trail hard to configure.
“The entire scam ecosystem depends on these accounts. Without a destination for the money, the scam fails at the first step. Those renting out their accounts are not just victims of circumstance; they are the engines of the crime,” a senior official said.
A study by central security agencies also found individuals in China, Malaysia, Myanmar, and Cambodia directing people in the Union Territory to create private crypto wallets.
These wallets are often set up using Virtual Private Networks (VPNs) to avoid detection and requiring no Know Your Customer (KYC) verification. The J&K Police have suspended the use of VPNs in the Valley, noting that terrorists and separatists often exploit the technology to evade tracking.
These mule accounts form the financial bedrock of international scam syndicates, and money funnelled through them may ultimately support separatist or anti-national operations, officials said
