Bangladesh Bank considers lawsuit against NY Fed over $81m hack

Bangladesh Bank considers lawsuit against NY Fed over $81m hack

Bangladesh's central bank is weighing up a lawsuit against the Federal Reserve Bank of New York, accusing the US institution of a "major lapse" over a hack which saw $81 million stolen from an account.

In early February hackers tried to transfer around $1 billion from Bangladesh Bank's account with the NY Fed, successfully stealing more than $80 million.

According to an internal Bangladesh Bank document, dated 13 March and seen by Bloomberg, the Fed blocked 30 giant transactions because of a lack of beneficiary details. However, five went through and were "subsequently flagged for due diligence review".

The document says "we view this as a major lapse on the part of FRB NY," adding that Bangladesh Bank is engaging legal counsel in New York City "to establish precise grounds of initiating lawsuit claiming recompense".

For its part, the Fed is not commenting beyond a statement it made earlier this month pointing out that its systems were not breached and the transactions were authenticated by Swift.

However, politicians are now weighing in. US Representative Carolyn Maloney has issued a statement saying that the "brazen heist...threatens to undermine the confidence that foreign central banks have in the Federal Reserve, and in the safety and soundness of international monetary transactions".

Maloney has requested a meeting with New York Fed president William Dudley and says she wants to ask about whether it is wise to rely solely on Swift to authenticate outgoing payments from foreign central bank accounts.

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