NY Fed rejected cyber-heist transfers before moving $81mn

NY Fed rejected cyber-heist transfers before moving $81mn
The Federal Reserve Bank of New York approved four fraudulent requests to send $81 million from a Bangladesh Bank account to cyber thieves after they had been rejected by the Fed's branch, sources told Reuters.

On the day of the theft in February the Fed initially rejected 35 requests to transfer funds to various overseas accounts. The transfers were denied because they lacked proper formatting for the SWIFT messaging system which the bank network uses for international financial transfers.

Later that day the hackers resubmitted the 35 requests. On the second try, the messages had the proper formatting, according to a New York Fed official.

The requests had been authenticated by SWIFT, and despite the technical compliance, the Fed rejected 30 of them once again.

However, five requests for a total of $101 million were approved, with one for $20 million later rejected because of a misspelling.

"They [the Federal Reserve - Ed.] are saying they rejected 35 badly submitted ones," said a source close to the Bangladesh bank. “But when the requests were re-submitted, they paid five of them and stopped 30. Why? They can give no answer."

READ MORE: Bangladesh may sue NY Fed over $100mn cyber heist

The Federal Reserve Bank holds the accounts of around 250 foreign central banks and governments.

Following the robbery, the Central Bank of Bangladesh said in March it was considering a lawsuit against the Federal Reserve. "We view this as a major lapse," said the bank, describing the incident.

The February hacker attack on the Bangladesh bank turned into one of the largest cyber heists in history. The thieves attempted to steal around $1 billion, and managed to get away with $81 million.