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Is Swift Bank Network Losing War Against Cyber Attacks?

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Swift, a global money transfer network used by banks, has suffered gaps in security standards that have resulted in at least three breaches – in Vietnam, Bangladesh and Ecuador, according to The Wall Street Journal.

Swift image

The hackers were able to gain access to Swift access codes and deliver authenticated yet fraudulent fund transfer requests. The network did not become aware of the incidents in Ecuador or Vietnam until after the fact. Hackers stole $9 million from an Ecuador lender last year and $81 million from the central bank of Bangladesh in February.

A former Swift official said the network has known its user connections are its weakest link and is in need of improvement. Leonard Schrank, who served as chief executive until 2007 after 15 years in that role, said the breaches are a big wake up call.

Swift Alerts Users To Threat

Swift, in response to the thefts, urged users in a memo Friday to improve security and reminded them they are required to inform the network immediately of any suspected fraud.

A Swift board committee is examining ways to support users’ efforts to secure systems and share information about cyber threats. The network has repeatedly said that its messaging network has not been infiltrated and that the attacks are on account of problems with users’ security.

A Swift spokesperson said the management of local systems, credentials and authorization is the customers’ responsibility.

The customer notice indicates Swift is addressing the threat, Schrank said. An additional step would be to have an “anomaly detector” that would delay suspect message traffic until it can be confirmed. Another option would be to require a stronger separation between Swift systems and banks’ networks.

Network Expands To 11,000 Banks

The network began in 1973 as a cooperative among 239 banks seeking a way to communicate about cross-border payments. The network now connects 11,000 banks and other players that sent more than 25 million messages per day on average in April.

The wide range of technologies and security levels among customers in more than 200 countries makes the security challenge worse. Every user receives a unique bank identifier code containing eight characters. A smart card on the Swift terminal at the client’s end authenticates every bank’s credentials.

Technology developments have enhanced the system’s capacity and use, but they have also made it more vulnerable. Instead of walking down a hall to a Swift terminal as they did in the past, users are now automatically connected to broader bank networks.

Under a program called “4 Pillars,” Swift focused on minimizing downtime and securing its core.

The first iteration of that work addressed avoiding system breakdowns and minimizing recovery times, according to a 2006 annual report. The second iteration focused on disaster recovery and physical security at Swift sites.

Vulnerabilities Exist

The recent threats have emerged near the network’s edges. More attacks risk damaging the network’s credibility and its utility should users have to check every order.

Steve Durbin, managing director of the Information Security Forum, a not-for-profit organization for global corporations, said the hub has a responsibility to make sure the “spokes” have the proper security in place. He said the system cannot have one of the third parties seen as a weak link since it destroys confidence in the system.

The attack on Bangladesh’s central bank exposed the first weak link. The attack resulted in an $81 million loss from its account at the Federal Reserve Bank of New York.

An official for the Bangladesh Bank who did not want to be named said the bank never changed its Swift passwords when hackers breached a computer operated by a staffer in late 2015 until the thieves got the credentials to the Swift terminal and ordered the transfers in February.

A spokesman for Bangladesh Bank, Subhankar Saha, said the bank did not know any of its computers were compromised until the February heist. As many as six to eight bank employees had access to the bank’s Swift credentials, he said. He did not comment on whether the passwords provided to the employees were changed or regularly rotated.

Also read: Panicking Swift urges banks to report cyber heists

Who’s Responsible?

The two parties – Swift and Bangladesh Bank – have argued over who is responsible for the compromised part of the system. The bank is responsible for the server on the premises, Swift said. The server provides the interface for bank computers to connect to the Swift network.

The bank said Swift installed the equipment, and its operations needed technical knowledge possessed by Swift technicians.

Attempts to probe payment networks include at attack in 2009 in which hackers sent fake emails by the millions to medium-size and small businesses. The emails appeared to be from a separate U.S. transfer network that a group called Nacha manages. Recipients who clicked the malware allowed the hackers to capture the users’ credential as they accessed the bank’s website.

Additional incidents could emerge. A note indicated it knew of recent fraud at a “small number” of customers, Swift said.

Bangladesh Attackers Active

FireEye Inc., a cybersecurity firm, said the Bangladesh attackers remain active.

Bryce Boland, chief technology officer at FireEye’s Asia Pacific region, said he is seeing the same threat actors target some of the company’s customers. He said he is confident other breaches are occurring.

J.P. Morgan Chase & Co. has started to take steps to secure its Swift interface by limiting access by some employees, people familiar with the bank said. The action is part of the bank’s policy of reviewing user access to certain systems after news breaks about security threats.

Lisa Sotto, who operates the Hunton & Williams LLP law firm’s privacy and security practice, said no single entity can control another entity’s systems, but tentacles are needed throughout the network.

Featured image from Shutterstock and SWIFT.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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Altcoins

Crypto-Security Testnet Surpasses Key Milestones

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Security and has been combined with micro-compucomputing are a combination which ascended to greatly relevant, both economically and financially, since the early days of commercial internet technology, the John McAfee associated era of anti-virus software, and fears of ‘millennium-bug’ (‘Y2K’)-induced societal meltdowns.

As a market player, ‘cybersecurity‘ is hailed for its continuedvalue and growth, with recent implementations advancing in tandem with technological development. With ‘blockchain’ having become a key buzzword in recent years, it comes as little surprise that digital security providers have been attempting to identify and provide protection against cryptocurrency related scams.

Examples of these include ‘malware‘ AKA ‘malicious software’. They are often created with the aim of illicitly subvert the processing power of the victim’s device for use towards the mining of cryptocurrencies, or lock and potentially delete highly sensitive data (such as Ransomware’).

Cybersecurity and Blockchain

Crypto attacks can affect almost any person or institution: from private wallets and exchanges, to cryptocurrency operators, and even sometimes unsuspecting users of internet browsers with no relation to blockchain based services.

In an article published at CCN in August 2018, I wrote about the large prolificity and news coverage of cyber-attacks carried out against cryptocurrency organisations: with a majority of them involving the theft of high-value quantities of tokens or sensitive data.

Key points raised in the piece include the identification of wallets and exchanges as high-value targets for potential thieves, as well as a discussion surrounding a study of over 1000 participants in which none of the top exchanges were “lauded for security”.

As cybersecurity has been exposed as a fatal flaw in the unauthorised access / theft access of finances and data, it has also drawn a spotlight on the various methods employed by the companies which suffer these attacks.

Middleware, Wear and Tear

Some teams attempt to protect their data and finances through the creation and implementation of their own proprietary cybersecurity solutions whilst others seek the tender of others,

‘Middleware’ is nothing new and has long been utilised as a means of implementing third-party solutions as a means of shifting professional a legislative liability regarding essential functions of a brand technology.

It’s a creation by third party product / service providers that sits between external and internal code in order to facilitate functions or protections.

Decentralized Security Testnet

REMME is a project harnessing blockchain technology to create a distributed cybersecurity solution for enterprises.

Its now-released testnet has already demonstrated the efficacy of storing hashed Public Key Infrastructure certificates on the blockchain, and with 300 pilot program participants signed up, REMME isn’t short of applicants eager to trial its distributed identity and access management solution.

‘Distributed Identity and Access management’ (IAMd) and ‘Public Key Infrastructure’ requests (PKId) count amongst two of the primary features of the proprietary REMChain testchain network infrastructure. Both claims of which have come from CEO Alex Momot, who additionally praised “The interoperability of the public blockchain and sidechains”.

Additional features include the ‘REMchain block explorer’ – ‘node monitoring’ (connected to five nodes worldwide) – REMME WebAuth demo application.

While a pilot program reportedly attracting over 300 global enterprise applicants, REMME feels confident about the future of their long terms plans: which include full integration existing enterprise systems (ERP, CRM, Accounting software etc.).

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Breaches

MyEtherWallet Compromised in Security Breach; Users Urged to Move Tokens

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Popular cryptocurrency service MyEtherWallet (MEW) is urging users to move their tokens after the platform succumbed to its second cyber attack of the year. As the company reported earlier, hackers targeted MEW’s popular VPN service in an attempt to steal cryptocurrency.

Hola VPN Users Compromised

Rather than target MEW directly, hackers took control of the Hola VPN service, which claims nearly 50 million users. For the next five hours, MEW users who had the Hola chrome extension installed and running on their computer were exposed.

MEW took to Twitter to urge users to move their funds immediately.

“Urgent! If you have Hola chrome extension installed and used MEW within the last 24 hrs, please transfer your funds immediately to a brand new account!” the company said. It added the following message shortly thereafter:”We received a report that suggest Hola chrome extension was hacked for approximately 5 hrs and the attack was logging your activity on MEW.”

At the time of writing, MEW’s Twitter feed had no further updates.

MyEtherWallet is used to access cryptocurrency wallets, where users can send and receive tokens from other people.

The company reportedly told TechCrunch that the attack originated from a Russian-based IP address.

“The safety and security of MEW users is our priority. We’d like to remind our users that we do not hold their personal data, including passwords so they can be assured that the hackers would not get their hands on that information if they have not interacted with the Hola chrome extension in the past day,” MEW said, as quoted by TechCrunch.

It’s not yet clear how many users were compromised in the attack or how much, if any, was stolen from their wallets. MEW suffered a similar incident in February after a DNS attack wiped out $365,000 worth of cryptocurrency from users’ accounts.

Cyber Attacks on the Rise

The attack on MEW came less than 24 hours after Hacked reported another major cyber breach involving Bancor, a decentralized cryptocurrency exchange. The security breach compromised roughly $23.5 million worth of digital currency, including Ethereum, NPXS and BNT, Bancor’s native token.

Last month, a pair of South Korean exchanges fell prey to cyber criminals, prompting local regulators to expedite their approval of new cryptocurrency laws.

It has been estimated that a total of $761 million has been stolen from cryptocurrency exchanges in the first half of the year, up from $266 million in all of 2017. That figure is expected to rise to $1.5 billion this year.

CipherTrace, the company behind the estimates, told Reuters last week that stolen cryptocurrencies are mainly used to launder money and aid criminals in concealing their identities.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 647 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Mt. Gox vs. Bithumb: That Was Then, This Is Now

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Bithumb now shares something in common with the Tokyo-based shuttered bitcoin exchange Mt. Gox — both suffered a hack on about the same date, June 19. It’s a club that no exchange wants to belong to and that Bithumb happened on the seven-year anniversary of Mt. Gox’s maiden attack has to be more than an eerie coincidence.

It’s a stark reminder of the risks involved with keeping funds on an unregulated exchange, vulnerabilities that cost South Korea’s Bithumb some $36.6 million in digital cash and Mt. Gox $450 million in hacked bitcoin and its future. The Mt. Gox theft unfolded over a series of hacks that culminated in 2014. Though it’s still early on in the Bithumb hack, it appears the South Korean exchange will recover from the security breach. So what do we know now that we didn’t on June 19, 2011?

Then vs. Now

Former Coinbase official Nick Tomaino, who is also the founder of crypto fund 1 confirmation, reflected on the Mt. Gox hack in what proved to be a prescient tweet given the Bithumb attack that was about to surface.

The thing to note about Mt. Gox is that the Japan-based exchange in 2011 controlled most of the BTC trading volume, approximately three-quarters of it by average estimates — more if you ask Tomaino. Since bitcoin fever caught on in 2017, there are more than 500 cryptocurrency exchanges on which trading volume is shared. Binance boasts the highest trading volume and captures nearly 15% of bitcoin trading. It’s much less than Mt. Gox days but still a little high.

The other thing to note is that the Mt. Gox hack or actually hacks, as there were multiple attacks on the exchange over several years, was a mysterious event that was shrouded in controversy and mistrust of a key executive. Bithumb, on the other hand, confronted the hack seemingly right away on Twitter and has not let any grass grow under its feet in the interim, which is a key difference in the way Mt. Gox was handled.

Also, the bitcoin price didn’t tank in response to the Bithumb hack. It traded lower for a while, but less than 24 hours it was back in the green, which is a reflection of the fact that bitcoin trading is no longer dependent on a single exchange.

Charlie Lee, creator of Litecoin (LTC), the No. 6 cryptocurrency by market cap, was among the first to respond to the Bithumb hack. He tweeted:

Indeed, Bithumb does expect to be able to cover the losses via their reserves.

Crypto Security

It’s still early on in Bithumb’s security breach, and more details are sure to emerge in time. In the meantime, it’s a good idea to use the hack as an opportunity to examine the security of your cryptocurrency investment portfolio. There are several hardware wallet options out there for you to choose from — whether it’s Trezor or Ledger Nano S, to name a couple — and as Charlie Lee advised, “only keep on exchange coins that you are actively trading.”

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 69 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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