Fed weighs enhanced scrutiny on transfers after $81M cyberheist

Fed weighs enhanced scrutiny on transfers after $81M cyberheist
© Haiyun Jiang

The Federal Reserve is considering “enhanced monitoring” for certain kinds of transactions, after hackers stole $81 million from the Bangladesh central bank’s account at the New York branch, Fed chairman Janet Yellen told lawmakers Wednesday.

ADVERTISEMENT

“We expect the institutions we supervise to make sure that they comply with procedures to control access to critical payment services and to review and insure that they're meeting security requirements,” Yellen said in response to questions from Rep. Carolyn Maloney (D-N.Y.), who said she was “very concerned” about the breach.

“I think this is a threat to the U.S. banking system,” Maloney said.

The New York Fed’s systems weren’t compromised, Yellen emphasized during a House Financial Services hearing on monetary policy.

In February, unknown hackers stole $81 million from the Bangladesh Bank account at the New York Fed in what is considered the largest cyberheist in history.

To pull off the heist, the hackers obtained the bank's login credentials for SWIFT, a messaging network used by banks across the globe to exchange information about financial transfers.

The incident has raised questions about the security of SWIFT software, and the Fed itself is now the subject of scrutiny on the Hill.

The House Science Committee has launched an investigation into the New York Fed, requesting a briefing by the New York Fed on the status of its investigation and "all documents or communications related to any review conducted by the NY Fed of its own information technology.”

Maloney has also demanded information on the breach from the Fed, pressing bank regulators on their response to the apparent weaknesses in SWIFT's networks in a May letter that was also sent to the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.

--This post was updated on Friday at 3:12 p.m.