B’desh Bank acknowledges theft of foreign reserve

Bangladesh Bank has acknowledged the theft of $101 million from its foreign reserve deposited with the US Federal Reserve Bank last month but claimed it thwarted an attempt to hack $870 million more.

A Bangladesh Bank spokesman overnight officially confirmed the theft amid media uproar in the past two days after sources in the central bank hinted unknown hackers stole the money while $81 million of the amount entered the Philippines and the rest went to Sri Lank to be used in casino business.

Talking to newsmen late on Wednesday, he said hackers breached the Bangladesh Bank security system in early February and stole credentials for payment transfers, in one of the biggest bank thefts in history.

"Then they ordered transfers out of a Federal Reserve Bank of New York account held by Bangladesh Bank," central bank spokesman, Subhankar Saha, said.

He added that the hackers sent 35 advices to the US Federal Reserve but only 5 of those were complied with until the theft was unearthed.

Bangladesh Bank officials said of the stolen amount $81 million entered the Philippine banking system on February 5, and several layers of subsequent transactions made its way out into Hong Kong and the rest $20 million ended up in Sri Lanka.

They said the thieves thereafter took an attempt to launder a further $870 million through the same channel, but their plan was foiled after an American bank recalled the transfer order.

"The American bank contacted us when they got their anti-money laundering alert to confirm if the pay order actually came from us ... we straightaway replied in the negative and so the payment was stopped," Saha said.

Cyber security experts said the perpetrators of the $100 million digital heist had deep knowledge of the institution's internal workings, which they might have gained by spying on bank workers.

Bangladesh Bank said they have launched an investigation into the theft and expected the amount to be returned while unconfirmed reports said the central bank sent its two officials to the Philippines to demand the return of the funds.

According to international media reports, the US Fed responded to the hacking saying there was no evidence its systems were compromised in the cyber attack.

It said they followed normal procedures when responding to requests that appeared to be from Bangladesh Bank, which were made and authenticated over SWIFT.

According to reports published in Philippines media, a Chinese-Filipino businessman was the mastermind of he theft who had moved the funds to three casinos, where they were converted into chips for betting at the gaming tables, according to the Philippine Daily Inquirer.