Can Blockchain Prevent Cybercrime?
As Featured on LetsTalkPayments.com
In the light of a recent heist of the Bangladesh Bank account from the New York Federal Reserve that resulted in cybercriminals making off with $81 million, many in investment banking are questioning whether there is a need to review financial software to improve cybersecurity measures within their institutions.
While the recent heist was foiled to prevent the intended transfer of $1billion dollars from Bangladesh Bank’s account, it still raises some concerns as to how and why the fraudulent activity wasn’t detected earlier and how it could be prevented in the future.
The failure of the system
The whole premise behind the heist involved using the centrally governed SWIFT (Society for Worldwide Interbank Financial Telecommunication) messaging system that is universally used and trusted by over 11,000 members. Using this system, the hackers stole the SWIFT credentials and sent 35 fraudulent messages in one day, requesting transfers totaling $1billion from the Bangladesh Bank to individual accounts. While looking at Bangladesh Bank’s account history should have already indicated something suspicious to the NY Federal Reserve, it didn’t. And it appears that the detection of the fraudulent messages was, in fact, a stroke of luck, rather than deliberate detection.
Initially, the 35 messages were rejected by the NY Fed because they missed vital information, but on resubmission by the hackers with the correct information supplied, five got through. However, the others were rejected by chance as the street name for the recipient bank in the Philippines was Jupiter Street, which just happens to be an Iranian oil tanker and shipping outfit that is under US sanctions.