Digital evolution of hawala money laundering networks

Investigations and reports have highlighted the evolving role of hawala and underground banking networks in facilitating global illicit finance.

An investigation by the European Broadcasting Union revealed that a WhatsApp group titled ‘Traders of Greater Europe’ was used to move hundreds of millions of euros for organized crime, drug trafficking, and terrorism financing. Belgian magistrate Vincent Guerra described the scale of the activity as ‘staggering,’ noting that the network utilized the ancient hawala system to coordinate cross-border payments without digital or paper trails. The group facilitated transfers to the United Kingdom and to Islamic State militants in Syria.

Further findings from the Financial Action Task Force (FATF) indicate that these informal value transfer systems are becoming increasingly digital. The FATF reports that networks are now utilizing fintech platforms, virtual assets, and mobile-linked transfers to provide ‘money laundering as a service.’ A case study involving Oman and Pakistan demonstrated how unlicensed operations use WhatsApp and e-wallets to target expatriate communities, reflecting a broader trend where over 80% of reporting jurisdictions identify these systems as primary channels for professional money laundering.