Bangladesh Bank Hacked for $81 Million - Gainesville Coins News
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Bangladesh Bank Hacked for $81 Million

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Bangladesh Bank Hacked for $81 Million

The region of Southeast Asia has earned a reputation, fairly or unfairly, for financial fraud and corruption. Situated on the other side of the globe from Western financial centers but close enough to important hubs like Hong Kong, an increasing amount of illicit financial activity now takes place in this part of the world.

Recently, a nefarious group of cyber thieves (ostensibly involving parties in Bangladesh and the Philippines) attempted to siphon nearly a billion dollars from the account of the Bangladesh Bank, the country's central bank, held at the New York branch of the Federal Reserve. The criminals were amazingly able to steal a cool $81 million before government officials caught on.

Unfortunately, it's highly unlikely that the perpetrators will be brought to justice, at least not anytime soon.

Lack of Credibility

HFT-programIt doesn't help the situation that, when it comes to security and oversight, South Asia and Southeast Asia are hardly the models of consistency. Cases of sensitive information or bank accounts being hacked are nearly as common in these places as they are in Russia and Eastern Europe. In short, there's a lack of credibility regarding the safeguards in place against these kinds of financial crimes.

The cyber heist in Bangladesh is a case in point. The end of the paper trail, so to speak, was traced to a pair of the the Philippine's casinos. By law, casinos are not covered by anti-money laundering laws in the country, raising doubts as to whether or not the country's officials are serious about preventing these kinds of crimes. Any reasonable observer knows that gambling establishments are the ideal place for dirty money to change hands in large amounts.

In an attempt to salvage some semblance of accountability, the governor of the Bangladesh Bank, Atiur Rahman, announced his resignation this Tuesday. He was joined by two deputy governors of the bank who were fired. Rahman will be replaced by the country's current finance minister.

Although the resignation is an attempt to convey accountability, there is not exactly a stellar reputation for security and credibility to build upon. Moreover, it should be noted that this event took place in early February and all of the relevant authorities were immediately aware. The resignation only happened after more than a month of pressure and unanswered questions.

(Pacific) Ocean's Eleven?

burglar clipartAuthorities are extremely doubtful that they can apprehend the hackers involved; they're not even certain how many people make up the group, nor what country they may be aligned with. For instance, a man in Manila, Philippines who apparently received $30 million from the heist may be a Chinese national—or, he may simply be ethnically Chinese and hold citizenship elsewhere. According to Reuters, "The president of a foreign exchange broker called Philrem Service Corp, Salud Bautista, told the Senate that her firm was instructed by the bank branch to transfer the [stolen] funds to a man named Weikang Xu and two casinos."

Another shady detail is that the bank in the Philippines where various bank accounts received the stolen funds, the Rizal Commercial Banking Corp (RCBC), reports that its closed-circuit television camera system was conspicuously not working at the time of the cyber heist, or at least when the money was transferred.

The more forthcoming details that arise in this case, the more opaque and suspicious and context becomes. Ultimately, the wildly ambitious crime was a huge success, which leads one to believe that people in high places were aiding and abetting the guilty parties.

About the Author

Everett Millman

Everett Millman

Analyst, Commodities and Finance
Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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