8 March AtoZForex, Lagos – The central bank of Bangladesh has reported a hack of its account with the U.S. Federal Reserve on Monday. The Bangladesh central bank stated that an unknown amount of funds was stolen after the hack. Yet, it was later confirmed that the money was traced to the Philippines and recovered through the anti-money laundering authorities.
The account was managed by the New York Fed, but the central bank has denied the system breach, without clarifying whether the account was actually drained, citing in confidentiality. Even though, it was not reported how much the hackers really managed to steal from the Bangladesh’s central bank. It is generally known that the Bangladesh’s central bank holds around $28 billion in foreign currency reserves, so the actual amount stolen might be near this maximum total in reserves.
New York Fed denies system breach
Commenting about the situation, the New York Fed spokeswoman said the following: “To date, there is no evidence of any attempt to penetrate Federal Reserve systems in connection with the payments in question, and there is no evidence that any Fed systems were compromised.” Questing further, the spokeswoman declined to comment about the measures taken by the U.S. central bank’s New York branch, in order to investigate the claim by its overseas counterpart.
The New York Fed holds about 250 central banks, governments, and other institutions foreign accounts. Most of these accounts are held in U.S. treasuries and agency debt, considering that the requests for funds arrive and are authenticated by a so-called SWIFT network that connects banks.
$100 Million leaked into the Philippines
According to a central bank official, who told the AFP in anonymity, a proportion of the funds were illegally transferred online to Sri Lanka and the Philippines. The bank pointed out that about $100 million got leaked into the bank system of the Philippines, which was then sold to the black market that is operated by a foreign exchange broker. Thereafter, the amount stolen money was split and transferred to three local casinos. Within days, the stolen amount was then sold back to the broker, where it was transferred to overseas accounts.
In partnership with the anti-money laundering authorities in the Philippines, the Bangladesh central bank has been working to recover the rest of the funds.
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