In the wake of hackers stealing $81 million from Bangladesh's central bank, as per an internal report from Bangladesh Bank, it has hired a U.S. lawyer to file a potential lawsuit against the Federal Reserve Bank of New York.
 
With this new spreading in the Dhaka, the capital of Bangladesh, Carolyn Maloney, a U.S. Representative called for a probe on last month’s cyber-attack on Bangladesh’s central bank.
 
In what has been attributed as one of the largest cyber heists in history, black hat hackers managed to transfer $81 million from Bangladesh Bank’s account in the New York Fed Bank to accounts in the Philippines.
 
“This brazen heist from the Bangladesh central bank’s account at the New York Fed threatens to undermine the confidence that foreign central banks have in the Federal Reserve, and in the safety and soundness of international monetary transactions,” said Maloney, a New York Democrat, in a statement.
 
The FBI is helping in the investigation of the heist which led to the sacking of the bank’s governor.
 
Maloney has also sent a letter to William Dudley, president of the New York Fed, requesting a private meeting with bank staff in order to know more details of the heist.
 
She has disclosed her intentions of raising several questions including one revolving around whether it is appropriate to rely solely on the SWIFT global bank messaging system to authenticate outgoing payments from foreign central bank accounts.
 
Her comments are the first signs that the incident could potentially gain political traction back home in the U.S. Being the top regulator for Wall Street, the New York Fed has started to face a volley of political criticism for its missteps and perceived conflict of interest for its role.
 
“We fully intend to reach out to the congresswoman and will endeavor to address her questions," said a spokeswoman from New York Fed.
 
Before this statement, the New York Fed, which is custodian of some 250 accounts belonging to governments and foreign central banks, had said very little publicly. On March 9 it had stated that the payments were made in the usual way and there was no evidence in its system to show that they were compromised.
 
On its part, the Bangladesh Bank has heavily criticized the New York Fed in its incident report, which surfaced on Tuesday but was dated March 13. As per its report, the New York Fed had allowed 5 of the 35 fraudulent payment instructions to go through.
 
"We view this as a major lapse," read the report from the Bangladesh Bank. The report said it is in the process of "preparing the ground to make a legitimate claim for the loss of funds" against the New York Fed "through a legal process."
 
Maloney in her letter now wants to know why the New York Fed treated the 30 transfers differently from the other five.
 
Forensic experts and the Bangladesh police are in the process of collecting information from the compromised computer systems to determine what exactly happened.

In a banking heist that has gone down as a record in history, hackers have managed to steal $80 million from one of Bangladesh’s central banks. A typo however prevented them from stealing $1 billion, as per bank officials.
 
As per two senior officials from Bangladesh’s central bank, hackers had managed to break into its banking system and had got their hands on the login credentials for payment transfers. They then sent a series of requests to the Federal Reserve Bank of New York requesting them to transfer funds from Bangladesh’s bank to entities in Sri Lanka and the Philippines.
 
Four such transfers involving a total of $81 million to the Philippines went through, the fifth however got stuck due to a spelling mistake. The transfer request to move $20 million to a Sri Lankan based NGO Shalika Foundation got held up because the hackers misspelt the name of the Foundation.
 
Instead of Shalika Foundation, the hackers keyed in “fandation” which prompted a routing bank, Deutsche Bank, to seek a clarification which stopped the transfer in its track, said officials.
 
During the same time, the unusually high number of payment requests raised the suspicion levels of officials at the Federal Reserve Bank of New York who promptly alerted their Bangladeshi counterparts.
 
Incidentally, the Bangladesh bank has billions of dollars in its current accounts with the Federal Reserve Bank of New York, which is used for settling international claims.
 
The transactions that were stopped amounted to $850-$870 million, said a banking official. The Bangladesh Bank has managed to partially recover the amount that was stolen. It is now working with anti-money laundering authorities in the Philippines so as to recover the rest.
 
Although it is more than a month since the attack has taken place, Bangladeshi officials are still in the process of identifying weaknesses in their systems and shoring up their security. The investigation could take months, with little hope of ever catching the perpetrators of the crime.
 
As per security experts, the hackers seemed to have a significant knowledge of the bank’s inner workings, which in most likelihood, were gained by spying on its workers.
 
Bangladesh’s Finance Minister, Abul Maal Abdul Muhith, has said the Federal Reserve Bank of New York must take responsibility for this crime.
 
"The Fed must take responsibility," said Abul Maal Abdul Muhith.
 
The country may resort to suing the Fed in an effort to recover the money. On its part the New York Federal Bank has said that its systems were not breached. Ever since the incident occurred it has been helping the Bangladeshi central bank to shore up its defenses.
 
As per officials, the hack occurred between February 4 and 5, during a weekend when the bank’s offices were shut. Security experts have founds the digital footprints suggesting that the Bangladesh bank’s systems were compromised. Computer security experts have also said the attack originated from a location outside Bangladesh.

Officials suspect that the money that has been traced to the Philippines may have trickled down to casinos. The Philippine Amusement and Gaming Corp, which oversees the country’s casino industry said it has launched its own investigation into the affair. Philippines anti-money laundering authority is also working on the case.
 
The dizzying global reach of this heist only goes to underscore the growing threat of cybercrime and how malicious hackers are increasingly finding chinks in the digital security systems that secure computer networks.