The Financial Action Task Force (FATF) has issued a stern warning to Pakistan, cautioning that its removal from the grey list in October 2022 does not make it immune to scrutiny over terror financing or money laundering. The warning follows reports that Jaish-e-Mohammad (JeM) has launched a female-focussed fundraising initiative using digital wallets to finance new training camps under the guise of religious education webinars.

At the conclusion of its September–October plenary, FATF President Elisa de Anda Madrazo confirmed intelligence reports pointing to the growing use of digital wallets for terror financing. She stated that Pakistan remains under a “follow-up process” through the Asia-Pacific Group (APG), despite its delisting two years ago. “Any country that is in the grey list but also exits the grey list is not bulletproof for actions of criminals, either money launderers or terrorists. We do invite all jurisdictions, including those that have been delisted, to continue their good work to prevent and deter crimes,” Madrazo said.

Fresh reports have put Pakistan under renewed scrutiny, with intelligence agencies discovering that terror financiers are exploiting prepaid wallets, crypto platforms and mobile banking apps to move funds between handlers in Karachi, Quetta and Peshawar, and cells in Afghanistan and the Gulf. After FATF’s crackdown on hawala networks, these groups allegedly shifted to e-wallets linked to fake IDs and front NGOs.