Mirroring the traditional hawala system, where money is sent through non-banking channels, this digital version uses the anonymity of unregulated cryptocurrency to erase the financial trail and inject cash into the domestic economy.
Under the new rules, users must take a "live selfie" using software that verifies their presence, typically through eye-blinking or head movement. The measure helps prevent the use of static photos or deepfakes.
A trends study conducted by India's Financial Intelligence Unit (FIU) has expressed suspicion that cryptocurrency is being used across the country in serious criminal acts like terrorist financing, fuelling secessionist activities, cybercrime, narcotics trafficking, illegal betting and gambling. The report, which was based on suspicious transaction reports and operational analysis, shared these trends and credible intelligence with law enforcement agencies.
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