Centre warns against illegal digital payment gateways

• The Indian Cyber Crime Coordination Centre (I4C) under the Union Home Ministry has issued an alert against illegal payment gateways created using mule bank accounts by transnational organised cyber criminals facilitating money laundering as a service.

Highlights:

Overview of the Alert:

• The Indian Cyber Crime Coordination Centre (I4C), under the Union Home Ministry, issued a warning about illegal payment gateways created by transnational cyber criminals.
• These criminals are using mule bank accounts to provide "Money Laundering as a Service" by laundering the proceeds of various cybercrimes.

Recent Findings and Law Enforcement Actions:

• Nation-Wide Raids: Raids by Gujarat and Andhra Pradesh police revealed illegal digital payment gateways set up through mule or rented bank accounts.
• Mule Bank Account Impact: According to The Hindu, mule bank accounts contribute significantly to financial scams in India, potentially siphoning off 0.7% of the country’s GDP.
• Scale of the Issue: I4C identified around 4,000 mule bank accounts daily through investigations and reports from state police agencies.

Methods Used by Cybercriminals

• Account Sourcing: Criminals obtain current and savings accounts from social media platforms, mainly Telegram and Facebook. These accounts often belong to shell companies or individuals.
• Remote Control: These mule accounts are controlled from overseas locations, adding a layer of complexity for law enforcement.
• Types of Illegal Platforms Involved: Accounts are used for deposits on illegal sites, including fake investment platforms, offshore betting and gambling websites, and counterfeit stock trading sites.

Mechanisms of Money Laundering

• Illegal Payment Gateways: Mule accounts are used to establish illegal payment gateways. Criminal syndicates then use these accounts to accept funds.
• Funds Layering: Received funds are quickly transferred to another account, with banks' bulk payout features being exploited for these transfers.
• Identified Gateways: Some known illegal gateways include PeacePay, RTX Pay, PoccoPay, and RPPay, reportedly operated by foreign nationals.

Advisory for Citizens:

• Precautionary Measures: I4C advises citizens not to sell or rent out their bank accounts, company registration certificates, or Udhyam Aadhaar certificates, as doing so can lead to legal consequences, including arrest.
• Reporting Mechanisms: Individuals are encouraged to report any cybercrime incidents on helpline number 1930 or at cybercrime.gov.in.

Prelims Takeaways

• Indian Cyber Crime Coordination Centre (I4C)