Evolving Terror Financing: The Digital Maneuvering of Jaish-e-Mohammed

In July 2025, the Financial Action Task Force (FATF) highlighted significant concerns regarding “serious and evolving terrorist financing risks” in the digital age. This description resonates with recent findings from Indian law enforcement agencies probing activities across the border, particularly those involving the Pakistan-based terror group Jaish-e-Mohammed (JeM).

Digital Wallets: A New Source of Funding

As conventional fundraising methods have become increasingly risky for JeM, especially following India’s Operation Sindoor that severely impacted the group’s operational base, they are now adopting modern financial tools. Reports reveal that JeM is utilizing digital wallet networks to secure funds for its activities. Notably, these wallets are reportedly controlled by family members of the group’s leader, Masood Azhar, enabling a covert mechanism to evade international oversight.

Digital Wallets at the Core of Funding

According to sources, platforms like EasyPaisa and SadaPay are integral to this new approach. Unlike traditional bank accounts, these digital wallets facilitate transactions that can be difficult to trace, allowing the group to circumvent scrutiny from international financial authorities. The innovative structure not only provides a means of financial support but also staves off attention from the FATF—a global institution primarily focused on combating terror financing.

The FATF’s July report emphasized how the integration of digital technologies with traditional financing methods has added complexity to tracking terrorist activities. The report discussed an uptick in the mixed methods used for financing, echoing the new strategies being implemented by groups like JeM.

The Mechanics Behind the Funding Strategy

Investigations have uncovered that JeM rotates through 7 to 8 different wallets every four months, activating approximately 30 new wallets each month. This strategy involves pooling large sums and dividing them into smaller amounts or converting them into cash. Such methods align closely with the FATF’s warnings about the escalation of complex financing systems employed by terror organizations.

Pakistan’s Delicate Position

For Pakistan, the introduction of this digital fundraising scheme comes at a politically sensitive moment. After spending years under the FATF’s scrutiny, Pakistan finally exited the grey list in October 2022. The country is acutely aware that any slip could result in re-listing, particularly with India indicating it might advocate for Pakistan’s return to the list due to ongoing failures to meet FATF standards.

The repercussions of grey-listing are severe: it restricts access to international funding, challenges private investment, and complicates dealings with multilateral lenders like the IMF. Given that Pakistan recently secured a $2.3 billion package from the IMF, it has a vested interest in maintaining its financial capabilities to support its struggling economy.

Economic Stakes and External Debts

The urgency of maintaining a clear financial path is underscored by Pakistan’s external debt situation, which stood at approximately $130.31 billion as of Q1 2025. This figure is slightly lower than the previous quarter but remains near historical highs. The country has historically faced wide fluctuations in its external debts, emphasizing the critical need for continued access to international financial resources to avoid potential destabilization.

Implications of JeM’s Digital Strategy

The effectiveness of JeM’s digital fundraising strategy is becoming increasingly apparent. Reports suggest that the organization has formulated an ambitious PKR 3.9 billion initiative to create an extensive network of “Markaz” religious centers, similar to operational hubs set up by Lashkar-e-Taiba. The calculations imply that the actual costs may be significantly lower, potentially providing surplus funds for arms procurement and operational planning against Indian targets.

Interestingly, while this digital workaround may offer Pakistan a temporary respite from FATF challenges, it also sets a foreboding precedent in the global fight against terror financing. As fiscal regulations evolve, it appears that groups like JeM will simply adapt, pushing their financing efforts further into the digital realm, complicating oversight and enforcement.

The developments surrounding JeM illustrate a stark reality: as the international regulatory framework tightens, the means of financing terrorism are not dissipating—they are merely transforming.