Security agencies have uncovered a rapidly expanding network of so-called “mule accounts” in Jammu and Kashmir that investigators believe forms the financial bedrock of international scam syndicates. Authorities are concerned that money funnelled through these accounts may ultimately support separatist or anti-national operations, news agency PTI reported.
Over the past three years, officials have identified and frozen more than 8,000 such accounts across the region, revealing an intricate system of laundering illicit funds.
Investigators describe mule accounts as the most vulnerable yet indispensable component in the cybercrime pipeline.
Without them, criminals would struggle to channel stolen funds into untraceable digital assets such as cryptocurrency.
In response to the growing threat, central security agencies have directed the Jammu and Kashmir Police and other enforcement bodies to engage with banks to stem the proliferation of these accounts.
Authorities are also working to track down intermediaries—commonly called “mulers”—who act as facilitators in the financial fraud chain.
According to officials, after the National Investigation Agency (NIA) launched a crackdown in 2017 on illegal financial flows into the region, anti-national networks appear to have adapted their methods.
Instead of relying on traditional channels, they are suspected of turning to what officials describe as a “digital hawala” system.
In this updated model, commissions earned by mule account holders and mulers may be diverted toward activities detrimental to national security.
A muler does not typically interact directly with scam victims or distribute fraudulent links.
Their role, though discreet, is pivotal. They recruit and manage a steady inventory of mule accounts that scammers use to receive and circulate stolen funds while shielding their own identities.
By maintaining this supply chain, mulers ensure the smooth movement of money across multiple accounts.
Many of these accounts belong to ordinary individuals enticed by the promise of easy earnings and reassured that the risk is negligible.
They are persuaded to surrender full access to their bank accounts—including online banking credentials—under the pretense that their accounts will be temporarily used as “parking accounts.”
In reality, these accounts become conduits for laundering proceeds from cyber fraud.
Investigations show that a single scam operator may be given control of anywhere between 10 and 30 mule accounts simultaneously.
In several instances, accounts are opened under the names of shell companies, enabling large-scale transfers—sometimes reaching Rs 40 lakh in a single day—without immediately triggering suspicion.
The movement of funds is deliberately complicated, with money swiftly routed through numerous accounts and fragmented into smaller transactions to evade monitoring systems.
Security officials stress that even if mule account holders are not the architects of scams or the individuals contacting victims, they are nonetheless complicit in money laundering.
By willingly handing over credentials and accepting commissions, they provide the infrastructure that allows transnational crime networks to thrive.
“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,” the agency quoted a senior official as saying.
A comprehensive study by central agencies has further revealed that individuals in countries such as China, Malaysia, Myanmar, and Cambodia are allegedly directing recruits in the union territory to create private cryptocurrency wallets.
These wallets are often established using Virtual Private Networks (VPNs) to mask digital footprints and typically do not require Know Your Customer (KYC) verification.
Authorities note that the regional police have already restricted VPN usage in the valley, citing its utility for terrorists and separatists seeking to avoid detection.
– Ends
With agency inputs
Published On:
Feb 15, 2026
