U.S. Federal Reserve Bank Hacked, Possible $100 Million Theft

Bangladesh’s central bank said on Monday its account with the US Federal Reserve Bank of New York had been hacked and money had been stolen from it, but that it had recovered some of the funds. The theft occurred February 5th, but officials are just now making public the size of the theft.

Bangladesh Bank said it had traced some of the money to the Philippines and was working with anti-money laundering authorities there.

However, the Federal Reserve Bank of New York denied that its payments systems were breached:

Bangladesh Bank released a statement to the media on Monday, saying its Financial Intelligence Unit is working with the Anti-Money Laundering Council (AMLC) of the Philippines to recover the rest of the funds.

According to media reports, AMLC is investigating a money laundering case involving $100 million reportedly stolen by hackers mostly from the accounts of a Bangladeshi bank.

According to reports of other media outlets, Chinese hackers stole money from the Bangladesh Bank account with the Federal Reserve in New York.

Of the funds, $75 million was transferred to a bank in the Philippines and the rest to a Sri Lankan bank, the reporters suggested.

The central bank said the AMLC had filed a case over the laundering of money and taken measures to freeze the bank accounts in question.

It said the World Bank, supported by its ‘forensic investigative team’ which is manned by a cyber expert, is also working with Bangladesh Bank to trace and recover the money.

Two Bangladesh Bank officials have already visited the Philippines and held meetings with officials of the country’s central bank –the Bangko Sentral ng Pilipinas (BSP) – for the recovery of the money.

According to the statement, the central bank will move to court once the AMLC completes its investigation and will tap the World Bank’s Stolen Assets Recovery Initiative (StAR), if necessary, to get the money back.

Finance minister was in dark

Finance Minister Abul Maal Abdul Muhith says he was unaware of the central bank losing money to hackers. He told reporters on Monday,

The minister described the incident as ‘unusual’ but declined further comment on it.

He faced questions on the matter when he talked to reporters after holding a meeting with the World Bank’s new Resident Representative Qimiao Fan.

http://bdnews24.com/economy/2016/03/07/bangladesh-bank-says-part-of-us-money-it-lost-to-hackers-recovered

http://www.business-standard.com/article/pti-stories/part-of-usd-100-mn-hacked-from-bangladesh-bank-recovered-116030701033_1.html

There is far more truth than poetry in your post.

Few people truly understand the inherent realities of cyberspace.

Unlike the physical domain:

Cyberspace allows for polyinstantiation: Anyone can be instantiated on multiple nodes in cyberspace, simultaneously. Think about being logged in to your computer, tablet, and smartphone at the same time. Then realize that there is no practical limit to the number of devices on which you can instantiate your presence, and that the devices do not need to be physically co-locatted or share the same domains and IP addresses. Note that the Advanced Persistent Threat (APT) discussed in the Mandiant report operated a “poisoned Domain Name Service (DNS) Command and Control (C&C) Network” that consisted of over 70,000 devices and IP addresses. More than a few harmless grandmothers had no clue that their Yahoo or Google account was an integral part of an international cyber espionage operation.

Cyberspace allows for polyvalence: Unlike a physical document, cyberspace allows for multiple “correct” values for a given datum.

Cyberspace allows for polysemes: A given “correct” data value can have multiple “valid” meanings.

Cyberspace is inherently flat: The threat is always at zero range with a direct fire weapon.

The net result is that the discipline and rules for double-entry book keeping in the physical world are meaningless and ineffective in cyberspace. In a very real sense, electronic voting is nothing more than electronic book keeping in cyberspace.

“Virtual goods” in cyberspace = fake = 100% gross margins.

The cost to accurately and completely replicate anything digital in cyberspace is decimal dust, approaching a mathematical limit of zero.

It is why intellectual property protection for electronic documents, videos, images, music, etc. in cyberspace is beyond difficult to the point of impossible.

When a stream of 1s and 0s representing a sum of fiat currency is transferred from one node to another in cyberspace, there is nothing that effectively prevents multiple copies of that stream of 1s and 0s being instantiated elsewhere as “valid” fiat currency. And because of polyinstantiation, polyvalence, and polysemes, you can “make the pot right” wherever, whenever, however, and as often as you need to satisfy the requirements of “double-entry book keeping.”

I am not aware of a single “hard” (physical) or “soft” (digital) “certificate” that has not already been repeatedly and remotely hacked.

Even “biometrics” must be turned into a digital file in order to be used for cybersecurity. Once it is digital, it can be compromised, replicated, and instantiated, as often as necessary.

If you place your faith in encrypting data in transit, recognize that the encrypted and unencrypted data must coexist simultaneously on a device for some finite period of time in order to send or receive the data. Think “scrape the hash” attacks against Active Directory.

The only reason that the Internet is functional, is that a combination of the economic benefits and efficiencies readily available to the vast majority of users coupled with the significant technical skills required to productively engage in criminal activity has kept the percentage of “bad actors” in the range of 0.06%, or perhaps 2M individuals, of whom “only” several hundred thousand have the sophistication to create the worst of the asymmetric effects.

For the most capable of these; compromise is truly failure: They don’t want anyone to know who they are, what they have done, who they work for, and what they are capable of. It would be bad for business if the 3.4 billion people with Internet access out of a world population of 7.3 billion (2015 data) were frightened away from using this wonderful thing known as the Internet.

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