It's spelled "Foundation" guys, not "Fandation"

Mar 11, 2016 00:10 GMT  ·  By

Hackers that breached Bangladesh's central bank account at the US Federal Reserve Bank of New York have botched a bank heist which would have pocketed them nearly $1 billion.

We reported on this incident four days ago, but details at that time were scarce. What was known was that a group of unknown hackers had accessed an account at a US bank belonging to the country of Bangladesh, which its central bank was using for international payments, said to contain over $20 billion.

The hackers initiated a series of transactions, which were at some point detected and stopped, but not before the intruders managed to move a large amount of money to the Philippines.

Silly mistake foils major bank heist

Ever since the heist came to light, more details have been uncovered by Reuters journalists, which have now found out that the attack actually took place on the night between February 4 and 5, 2016.

The hackers logged into Bangladesh's account at the US Federal Reserve Bank of New York and initiated three dozen bank transfers to different banks across the world.

The first four transactions went through to bank accounts belonging to several casinos in the Philippines and totaled $81 million.

Problems appeared at the fifth operation, which was sent to the bank account of an NGO in Sri Lanka. Reporters are saying, quoting US bank officials, that the hackers misspelled the name of the NGO writing "Shalika Fandation" instead of "Shalika Foundation."

Deutsche Bank was the first to spot the problem

Because the money had to move through a serious of intermediary banks before it could reach Sri Lanka, the misspelled name triggered alarm bells at German bank Deutsche Bank, but not before forwarding the money to Sri Lankan bank Pan Asia Banking Corp.

By the time Deutsche Bank realized there is no Shalika Fandation registered in Sri Lanka, the money was already in the country. Fortunately, Pan Asia was also investigating, because it was unusual for them to receive such a large sum of money.

About the same time, US Federal Reserve officials were also noticing a big queue of large transfers from Bangladesh's account and also contacted the country's central bank officials.

At this point, Federal Reserve employees intervened and stopped the transfers, realizing what was happening. US bank officials are saying that they've managed to stop transactions worth of over $870 million, which would have easily meant this was the biggest cyber-heist in history.

Was it spear-phishing?

All of this seems to be a case of where the hackers used spear-phishing and social engineering tactics to get hold of some Bangladesh central bank employee's login credentials.

We say this because the US Federal Reserve is denying its systems were hacked, while Bangladeshi officials are threatening to sue the bank because it did not detect the intrusion. This makes us believe the hacker used legitimate credentials to log in, which did not trigger alarm bells at the US bank until later on, when its employees noticed the high number of transactions.

Currently, the Bangladesh central bank is busy recovering its funds with the help of Filipino authorities.