Bangladesh’s central bank has suggested the Federal Reserve Bank of New York had a “major lapse" in allowing hackers to transfer $101 million in transactions that it later flagged as suspicious, according to an internal document seen by Bloomberg.
The document, dated March 13, sheds new light on Bangladesh Bank’s interpretation of a cyber heist in which hackers tried to steal nearly $1 billion last month. It outlines the strategy for recouping the stolen cash, including possible legal measures, and doesn’t appear to include input from anyone outside the central bank.
It also shows the New York Fed and Bangladesh put in place greater security measures on transfers immediately after the theft.
In early February, the Federal Reserve Bank of New York blocked 30 transactions from Bangladesh’s account valued at $850 million because of a lack of beneficiary details, according to the Bangladesh Bank document. However, the New York Fed allowed another five transactions to go through “which they subsequently flagged for due diligence review," it says.
“We view this as a major lapse on the part of FRB NY," the document says, referring to the New York Fed. Bangladesh is engaging legal counsel in New York City “to establish precise grounds of initiating lawsuit claiming recompense," it says.
Fed Response
New York Fed spokeswoman Andrea Priest said they aren’t commenting beyond a statement earlier this month. The instructions to make the payments from the account of Bangladesh’s central bank followed standard protocols and were authenticated by the SWIFT message system used by financial institutions, a Fed spokeswoman said on March 8.
Subhankar Saha, spokesman for Bangladesh Bank, said he won’t comment on any internal document or any part of the investigation.
Investigators are still trying to determine the masterminds of the heist. Earlier this month Bangladesh Finance Minister Abul Maal Abdul Muhith said the Fed was responsible for the stolen funds.
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