Crypto, Hawala and shell foundations: How Khalistani and Islamist groups exploit charities abroad to fund terror | Explained

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Several Khalistani and Islamist groups operating in Canada, the United Kingdom and Australia have been misusing charitable organisations to launder donations for terror financing, according to intelligence intercepts accessed by CNN-News18.

Investigations by both Indian and Western agencies show that a network of registered non-profits has diverted funds meant for welfare and humanitarian causes into propaganda campaigns, recruitment drives and even the legal defence of extremists involved in anti-India plots.

Misuse of Sikh charities

Among the groups named are Khalsa Aid, Sikh Relief and the World Sikh Organisation. Intelligence findings suggest that some of these organisations diverted donations to radical outfits, while also sponsoring events that glorified militants of Babbar Khalsa International (BKI) and Khalistan Tiger Force (KTF).

Several gurdwaras were found to have hosted so-called martyrdom ceremonies where pictures of BKI and KTF operatives were displayed. These ceremonies celebrated those responsible for assassinations of Indian leaders.

Links to Pakistan’s ISI

Canadian authorities have increased scrutiny of Sikh charities after evidence showed money transfers to terrorist-linked groups. According to CNN-News18, remittances collected by Canadian charities were sometimes routed through hawala networks or crypto wallets to Khalistani supporters.

The investigation further revealed that certain charities in Canada and the UK received funds from shell foundations connected to Pakistan’s Inter-Services Intelligence (ISI). These were disguised as disaster-relief donations through the ISI-controlled Inter-Services Welfare Fund.

Some youth outreach programmes run by these groups have been accused of indoctrinating young Sikhs with Khalistan ideology. Intelligence inputs suggest charity premises were also used for ideological training and digital radicalisation sessions.

Islamist-linked charity abuse

The misuse of non-profits is not limited to Khalistani groups. CNN-News18 reported that Islamist organisations in Canada, the UK and the Gulf have also exploited charities such as Gulf Relief for Syria and Helping Hand for Relief & Development. Funds raised under humanitarian appeals were later traced to Hamas, Lashkar-e-Taiba (LeT), Al-Qaeda affiliates and proscribed Pakistan-based entities like Jamaat-ud-Dawa (JuD) and Falah-e-Insaniyat Foundation (FIF).

Donations collected under the banner of education and orphan welfare were layered across multiple entities to conceal transfers to these banned groups. NGO bank accounts were allegedly used to finance terrorist travel, create false invoices, and procure dual-use items like communication equipment, drone parts and vehicles later deployed in attacks.

Radical preachers linked to Tablighi and Deobandi networks have also used charity-supported mosques to recruit volunteers and raise funds. Intelligence reports suggest that extremist sermons were disguised as community service activities to shield them from scrutiny.

Encrypted crowdfunding under humanitarian appeals

According to CNN-News18, Islamist groups have increasingly relied on encrypted crowdfunding to raise money during crises in Gaza, Rohingya camps and Kashmir. Donations were collected through cryptocurrency and e-wallets. Intelligence intercepts show that portions of these funds were ultimately diverted to Hamas and ISIS-Khorasan (ISIS-K).

The revelations highlight a growing global pattern of charities being exploited as fronts for terrorism. While many donors may genuinely believe they are contributing to humanitarian relief, intelligence agencies warn that a portion of these funds is ending up in the hands of groups that threaten security in India and beyond.