Bangladesh Bank weighs lawsuit against NY Fed over hack of the Federal Reserve Bank of New York. An internal report by the Bangladesh bank points out that the move was decided after hackers stole $81 million from its accounts with the NY Fed.
According to Ejinsight, following the report surfaced in the Bangladesh capital of Dhaka on Tuesday, the United States Representative Carolyn Maloney sought for an investigation of last month's cyber attack on the Bangladesh Bank.
The hackers ordered the New York Fed to transfer $81 million from the Bangladesh Central Bank funds 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," Maloney, a New York Democrat, claimed in a statement.
Yahoo! Finance noted that the U.S. Federal Bureau of Investigation is aiding in the probe of one of the largest cyber heists in history. The probe also led to the termination of the Bangladesh Central Bank governor.
In a letter sent by Maloney to the New York Fed President William Dudley, she requested a private meeting with the bank staff in order to tackle the cyber fraud. She also stated that she wants to raise a number of questions, which include whether it is appropriate to depend solely on the SWIFT global bank messaging system to authenticate outgoing payment from foreign central bank accounts.
However, her statements are treated as the first sign that the attack could also draw political traction in the United States. The NY Fed has also faced a political criticism since the financial crisis for missteps.
The agency has also perceived conflicts of interest in its role as the central bank's top Wall Street regulator, as reported by Reuters. "We fully intend to reach out to the congresswoman and will endeavor to address her questions," a New York Fed spokeswoman stated on Tuesday.
The NY Fed has previously revealed very little details about the heist in public. It had claimed beyond a March 9 statement that the payments made were still processed in the usual way and that there was no evidence that its systems were compromised. The office of the Fed's Investigator General also claimed that it is aware of the situation but has not further given any comments on whether it will conduct its own review.
Meanwhile, the Bangladesh Bank criticized the NY Fed in an incident report, claiming that the New York Fed allowed five of 35 fraudulent payments to go through. The Bangladesh Bank and forensics experts hired by the bank are still gathering information from its computer systems to find out what really happened.
