Terror Financing via Cryptocurrency Uncovered in Khyber Pakhtunkhwa: Pakistan Faces Rising Digital Terror Threat
By M. Ilyas Mullakhel | Peshawar, September 27, 2025
The Counter Terrorism Department (CTD) of Pakistan has recently unveiled a serious development: terrorists operating in Khyber Pakhtunkhwa are increasingly being funded through cryptocurrency, signaling a new dimension in digital terrorism. According to the CTD report, a major ISIS-linked network active in the province has been directly involved in suicide attacks and other violent extremist activities.
Cryptocurrency: The New Channel for Terror Financing
CTD officials revealed that facilitators of a foreign suicide bomber received funds transferred from Afghanistan in cryptocurrency. Initially routed through an e-wallet in Quetta, these funds were later converted into Pakistani Rupees and moved to Lahore and Karak. This intricate financial chain enabled terrorists to disguise transactions from national authorities, highlighting the growing challenge of regulating digital finance.
Network of Facilitators Across the Region
Investigations indicate that the handlers and facilitators of these terrorists were active not only in Khyber Pakhtunkhwa but also in Quetta, Khyber District, southern KP districts, and Kohat. On May 11, a 22-year-old foreign suicide bomber attacked a police mobile van. His intended target, a political and religious leader, was missed due to police intervention, preventing a major catastrophe.
The report also notes that the attacker had entered Pakistan via a private flight through Islamabad Airport in April of the previous year. Subsequent CTD operations resulted in the arrest of seven terrorists connected to the network, while others remain at large.
Global Trend: Rise of Digital Terrorism
This incident mirrors a global trend where terrorist organizations are increasingly exploiting cryptocurrencies and other digital tools to fund extremist activities. Previously reliant on traditional banking systems and hawala networks, terrorist groups are now leveraging unregulated, hard-to-trace financial channels.
Multiple cases from the U.S. and Europe have documented terrorist groups raising funds through Bitcoin and other cryptocurrencies, while in the Middle East, ISIS cells have even utilized online donation platforms. Experts note that the complexity of blockchain technology combined with the lack of international regulation makes such digital financing attractive for extremists.
New Challenges for Governments
Governments worldwide, including Pakistan, face formidable challenges in combating this new form of terrorism. Rapid technological advancement outpaces law enforcement capabilities, and monitoring cryptocurrency transactions is both technically demanding and legally complex.
For Pakistan, the primary challenge lies in tracing and dismantling these financial networks before they fuel further terrorist activities. Experts emphasize the need for strong collaboration between financial institutions, technology companies, and law enforcement agencies.
Police and CTD Strategy
A senior Bannu Police officer stated, “Now the Taliban may advance, but police will stay right behind them.” He stressed that operations against terrorists and their facilitators will be intensified. The CTD has also warned that not only terrorists but their financiers and facilitators will face legal action.
Experts’ Opinions and Recommendations
Security and financial experts consider this a new dimension of terrorism. Cryptocurrency has provided terrorist organizations with tools unimaginable a decade ago.
Brigadier (R) Mehmood Shah, a security analyst, emphasized, “Pakistan must urgently implement a comprehensive Cyber Financial Security Policy, or these new tactics of terrorism will prove far more damaging in the future.”
Experts unanimously warn that dismantling the digital economy of terrorism should be a top priority. Failure to act could escalate this trend into one of the gravest threats to regional stability and global security.
