Cryptocurrency-Based Terror Financing On The Dark Web: Prosecutorial Challenges Under PMLA, UAPA, And It Act In India
Kumar Kartikeya, Ph.D Scholar (Law), NIMS University
Om Pratap Singh, Advocate, Allahabad High Court, Lucknow Bench Founder, Law Foundation (NGO), Lucknow, Uttar Pradesh
ABSTRACT
The convergence of cryptocurrency and the dark web has created a formidable new theatre for terrorist financing one that is pseudonymous, borderless, and structurally resistant to conventional investigative mechanisms. In India, the legal response to this threat has been largely reactive: the Prevention of Money Laundering Act, 2002 (PMLA), the Unlawful Activities (Prevention) Act, 1967 (UAPA), and the Information Technology Act, 2000 (IT Act) constitute the primary legislative arsenal, yet none was architected with Virtual Digital Assets (VDAs) in mind. The Financial Action Task Force's (FATF) Comprehensive Update on Terrorist Financing Risks (July 2025) flags that 69% of assessed jurisdictions exhibit major deficiencies in effectively investigating and prosecuting terror financing cases a finding that carries direct implications for India's enforcement apparatus. India's own PRAHAAR counter-terror doctrine (2026) acknowledges the use of crypto wallets and dark web channels for terror financing, yet stops short of prescribing a coherent operational framework for blockchain forensics and inter-agency coordination. This paper undertakes a doctrinal and analytical examination of the existing statutory framework, identifies structural lacunae in definitional scope, jurisdictional reach, and real-time enforcement, and proposes legislative and institutional reforms calibrated to India's position as both the world's leading nation in crypto adoption and a primary target of state-sponsored cross- border terrorism.
Keywords: Cryptocurrency, Terror Financing, Dark Web, PMLA, UAPA, IT Act, Virtual Digital Assets, FATF, Blockchain Forensics, PRAHAAR, Financial Intelligence Unit, India
