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Fed Initially Blocked Bank of Bangladesh Swift Transfers

Avatar newsbtc 4 years ago

The story regarding the Bangladesh bank heist as part of an attack on the Swift payment network is far from over. As it turns out, the Federal Reserve blocked all 35 transactions executed by unknown assailants in February of 2016. However, four of those transfers got through after a second attempt, despite still being labeled as suspicious.

Anonymous sources told Reuters how the Federal Reserve was intervening when the Bank of Bangladesh was dealing with a security breach. Assailants tried to sluice funds spread over 35 different transactions through the Fed. That funds was destined to end up in bank accounts belonging to individual users, rather than business accounts.

Swift Transactions Slip Through A Second Time

During the first attempt, all transactions were rejected because the transfer details were not up to par with Swift requirements. This forced the Federal Reserve banking software to flag all transactions as “suspicious”. However, the assailants attempted the same transfers a day after, and for some unknown reason, four transactions went through. From what we can gather, none of the payment details were altered during this process.

What made these particular transfers so unusual is how the Bank of Bangladesh rarely allows transfers to non-corporate bank accounts. Thirty-five transfers at once raised red flags at the Federal Reserve. In a perfect world none of these transfers would have gone through the second time around either. Especially when the recipient information has not changed, and transfers originate from the previously flagged accounts.

Neither Swift nor the Bank of Bangladesh responded to these claims by anonymous sources at the time of writing. Moreover, The Federal Reserve continues to refuse to take the blame for four transactions slipping through, as their security procedures are watertight.

It will take several months, if not years, before all of the details regarding this Swift heist see the light of day. In fact, we may never know the full scope of this attack, and how it took place. Several law enforcement agencies are actively conducting research regarding this matter, albeit there are no official conclusions so far.

This goes to show yet again how a centralized financial system where so many parties are involved creates a lot of issues. Parties do not communicate with one another, and consumer funds are under constant threat. Bitcoin offers a far more secure and versatile solution, where consumers control their funds, rather than third parties.

Source: Reuters

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