Bangladesh to sue US bank after suspected Chinese hackers allegedly steal US$100m from account

The Federal Bank of New York denies its systems were breached despite allegations from Bangladesh that nearly US$100 million (S$139 million) were stolen by hackers.
The Federal Bank of New York denies its systems were breached despite allegations from Bangladesh that nearly US$100 million (S$139 million) were stolen by hackers.PHOTO: BLOOMBERG NEWS

NEW YORK (Reuters/AFP) - Bangladesh's government said on Tuesday (March 8) that it was planning to sue the Federal Reserve Bank of New York after hackers allegedly stole nearly US$100 million (S$139 million) from a reserve account.

Suspected Chinese hackers stole the money from Bangladesh's foreign exchange account on Feb 5, according to a Dhaka central bank official and media reports.

But the US reserve bank, which manages the Bangladesh Bank reserve account, denies its systems were breached.

"We've heard that Federal Reserve Bank of New York has completely denied their responsibility. They don't have any right," Finance Minister A.M.A. Muhith told reporters in Dhaka.

"Of course, we'll file a case against them. We have kept the money with them. They are responsible," he said, when asked what action his government would take against the bank.

An official told AFP the stolen money was illegally transferred online to the Philippines and Sri Lanka.

Bangladesh Bank, the central bank, on Monday said it had recovered part of the money and was in contact with the Philippines' anti-money laundering authorities to track down the rest.

The Federal Reserve Bank of New York said on Tuesday that it had followed normal procedures in transmitting funds that Bangladesh's central bank has said were stolen by cyber criminals from its Fed account.

The Federal Reserve Bank of New York issued a brief statement on the incident a day after Bangladesh's central bank disclosed the theft, saying its account at the US Federal Reserve had been hacked.

The New York Fed has said there was no evidence that its systems had been compromised. "The payment instructions in question were fully authenticated by the Swift messaging system in accordance with standard authentication protocols," said the statement from the New York Fed, which manages accounts for some 250 central banks, governments and other institutions globally.

"The Fed has been working with the (Bangladesh) central bank since the incident occurred, and will continue to provide assistance as appropriate," it said.

Swift, a Belgian-based provider of messaging services for banks, issued a short statement late on Tuesday saying it was looking at the case. "Swift does not comment on individual users or messages, but can confirm it is in contact with the parties concerned," the statement said.

"Messages sent over Swift are authenticated between sending and receiving institutions. There is no indication that our network has been compromised," it said.

Swift was founded as the Society for Worldwide Interbank Financial Telecommunication in 1973.

Some 250 central banks, governments, and other institutions have foreign accounts at the New York Fed, which is near the centre of the global financial system. The accounts hold mostly US Treasuries and agency debt, and requests for funds arrive and are authenticated by a so-called Swift network that connects banks.