Bangladesh alleges USD100mln stolen from NY Fed, transferred to Sri Lanka

Mar 09, 2016 (LBO) – Bangladesh’s government says it plans to sue the Federal Reserve Bank of New York after hackers allegedly stole nearly USD 100 million from a reserve account and transferred funds to Philippines and Sri Lanka.

Suspected hackers stole the money from Bangladesh’s foreign exchange account on February 5, according to a Dhaka central bank official, the Business Standard reported.

But the US reserve bank, which manages the Bangladesh Bank reserve account, denies its systems were breached.

“We’ve heard that Federal Reserve Bank of New York has completely denied their responsibility. They don’t have any right,” Finance Minister AMA Muhith told reporters in Dhaka.

“Of course, we’ll file a case against them. We have kept the money with them. They are responsible,” he said, when asked what action his government would take against the bank.

An official told AFP the stolen money was illegally transferred online to the Philippines and Sri Lanka.

Bangladesh Bank, the central bank yesterday said it had recovered part of the money and was in contact with the Philippines’ anti-money laundering authorities to track down the rest.

On its official Twitter account, the Federal Reserve Bank of New York wrote: “Regarding hacking reports, there is no evidence of attempts to penetrate Federal Reserve systems & no evidence Fed systems were compromised.

Some 250 central banks, governments and other institutions have foreign accounts at the New York Fed. They hold mostly US Treasuries and agency debt, according to the New York Post.

The New York Fed has been hacked before. A British citizen was accused in 2014 of breaching its servers and posting private data.

The Central Bank of Bangladesh, which has $28 billion in currency reserves, said hackers looted its account Feb. 5 and moved money to the Philippines and Sri Lanka, Agence France-Press reported.

The funds were “brought into the Philippines’ banking system, sold to a black-market foreign-exchange broker, transferred to at least three large local casinos, sold back to the money broker and moved out to overseas accounts — all in a matter of days,” the Philippines’ Daily Inquirer said.