A recent heist of more than $81 million from the Central Bank of Bangladesh following a SWIFT security breach has drawn the focus of a US congressional committee, opening up a deeper investigation into the entirety of the payments process. More specifically, the US Federal Reserve Bank of New York is being investigated for its handling of the heist that has already expanded to upwards of twelve banks across several countries, according to a recent CNBC report.
The new world of online trading, fintech and marketing – register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.
The recent investigation has its roots in February 2016, in which cyber criminals tried to transfer upwards of $951 million from the Bangladeshi central bank’s account at the Federal Reserve Bank of New York. While largely unsuccessful, hackers did succeed in stealing roughly $81 million, which was subsequently rerouted to entities in the Philippines and has since been unaccounted for.
The Bangladesh Bank attack managed to successfully manipulate SWIFT client software known as Alliance Access. SWIFT currently oversees a global payments network, though the recent onset of attacks has drawn into question not only the culpability of company technicians but the levels of defense employed by domestic and regional central banks.
The FX Global Code – Is Self-Regulation the Future of the Industry?Go to article >>
Since then, allegations of blame has oscillated back and forth between Bangladeshi authorities and SWIFT officials, especially after a recent report last month surfaced that a lapse by SWIFT technicians opened up the bank to acute vulnerabilities.
A formal process was instigated with a letter sent to New York Fed President William Dudley. In the letter, the congressional committee requested all documents and communications related to the cyber heist from the Bank of Bangladesh account. Furthermore, the committee is also attempting to ascertain the level of oversight currently employed at the Fed, with specific emphasis on the SWIFT system.
According to House Science Committee Chairman Lamar Smith, in a recent letter on the nature of the investigation: “In light of the recent cyber attacks on our global financial systems, the Committee believes it is imperative to receive information from the NY Fed about its response, its oversight of SWIFT, the status of the investigation, and any remedial steps taken to address vulnerabilities.”
“The question of bringing those responsible to justice is an important one. To date, investigators have not publicly announced significant progress,” he reiterated.