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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.

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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.

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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.

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Uber Is Paying Hackers to Keep Quiet

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Uber Technologies Inc. has reportedly paid hackers to delete scores of private data stolen from the company in a security breach that was concealed for over a year. The revelation provides further confirmation that, when it comes to cyber security, crime does pay.

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Massive Data Breach

According to Bloomberg Technology, hackers retrieved the personal data of 57 million Uber customers and drivers at some point last year. Nobody heard about it because the rideshare company paid the hackers $100,000 to keep quiet. A purge at the front office of Uber also ensured that the massive cyber breach was kept under wraps.

The compromised data was from October 2016 and included the names, phone numbers and addressed of 50 million Uber riders globally. About seven million drivers had their personal information accessed as well.

At the time of the cyber attack, Uber was inundated with a slew of legal issues stemming from alleged privacy violations. Rather than shine even more negative spotlight on the company, Uber executives decided to pay hackers to stay quiet.

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“None of this should have happened, and I will not make excuses for it,” Dara Khosrowshahi, who took over as CEO in September, said in a statement that was published by Bloomberg. “We are changing the way we do business.”

Hackers have done a masterful job infiltrating companies and governments in recent years. As a reminder, recent cyber attacks levied against Yahoo!, Target Corp and Equifax Inc. dwarf Uber’s 57 million compromised accounts.

Various reports indicate that cyber attacks are bleeding the global economy dry. One report, issued by the World Economic Forum, suggests that cyber crime cost the world economy $445 billion in 2016. If cyber crime were its own market cap, it would exceed Microsoft Inc., Facebook Inc. and ExxonMobil Corp

The Fall of Uber?

Uber revolutionized the ride-hailing business over the span of seven years by giving more power to the consumer. Several missteps later, the company finds itself in legal hot water, with its future appearing less certain than it did just one year ago.

The rideshare company faces at least five U.S. probes ranging from bribes to illicit software and right up to unethical pricing schemes. According to another Bloomberg report, Uber is under investigation for violating price transparency regulations, not to mention the alleged theft of documents for Google’s autonomous cars.

Some governments are sensing weakness in the ride-hailing service, and are moving toward banning the Uber app entirely. London is the most prominent example of a city that has taken definitive steps to outlaw the service over a “lack of corporate responsibility.”

Even with its legal troubles, Uber is a revolutionary technology that has influenced a bevy of other innovations aimed at improving the human experience.

Featured image courtesy of Shutterstock. 

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Ethereum Notches Two-Month High as Bitcoin Offspring Triggers Volatility

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Digital currency Ethereum climbed to a two-month high on Monday, taking some of the heat off Bitcoin and Bitcoin Cash, which have slumped since the weekend.

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Ethereum Forges Higher Path

Concerns over Bitcoin created a favourable tailwind for Ethereum (ETH/USD), which is the world’s No. 2 digital currency by total assets. Ether’s price topped $340.00 on Monday and later settled at $323.54. That was the highest since June 20.

At its peak, ether was up 10% on the day and 70% for the month of August.

The ETH/USD was last down 2.2% at $315.02, according to Bitfinex. Prices are due for a brisk recovery, based on the daily momentum indicators.

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Fractured Bitcoin Community

Bitcoin and its offshoot, Bitcoin Cash, retreated on Monday following a volatile weekend. The BTC/USD slumped at the start of the week and was down more than 3% on Tuesday, with prices falling below $3,900.00. Just last week, Bitcoin was trading at new records near $4,500.00.

Bitcoin Cash, which emerged after the Aug. 1 hard fork, climbed to new records on Saturday, but has been in free-fall ever since. The BTH was down another 20% on Tuesday to $594.49, according to CoinMarketCap. Its total market value has dropped by several billion over the past two days.

Analysts say that a “fractured” Bitcoin community has made Ethereum a more attractive bet this week. The ether token has shown remarkable poise over the past seven days, despite trading well shy of a new record.

Other drivers behind Ethereum’s advance are steady demand from South Korean investors and growing confidence in a smooth upgrade for the the ETH network. The upgrade, which has been dubbed “Metropolis,” is expected in the next several weeks. Its key benefits include tighter transaction privacy and greater efficiency.

Ethereum Prices Unaffected by ICO Heist

Fin-tech developer Enigma was on the receiving end of a cyber-heist on Monday after hackers took over the company’s website, mailing list and instant messaging platforms. The hack occurred three weeks before Enigma’s planned Initial Coin Offering (ICO) for September 11.

In addition to defacing the company’s website, the hackers pushed a special “pre-sale” ahead of the ICO. While many users realized it was a scam, 1,492 ether tokens – valued at $495,000 – were directed into the hackers’ cryptocurrency wallet by unsuspecting backers.

The irony in all this is that Engima is a cryptography company that prides itself on top-notch security protocols. The company issued a statement that its servers had not been compromised.

ETH/USD (Bitfinex)

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Ethereum Prices on Track for 35% Monthly Drop

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It has been a difficult month for ethereum. The world’s No. 2 digital currency has lost a third of its value over the past 30 days following a series of cyber breaches targeting vulnerable wallets and ICOs.

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Ethereum Struggles to Regain Momentum

Ethereum (ETH/USD) was trading near $197.00 Sunday at 6:30 BST, according to Bitfinex. That represents a decline of around 5%. At current values, ethereum’s market cap was $18.4 billion.

The ETH/USD exchange rate has struggled throughout July, with prices briefly falling below $160.00. The decline, which amounted to a 60-day low, lured bargain-hunters back into the market. After surging back toward $250.00, the ETH/USD has consolidated below the $220-mark, which continues to offer strong resistance. On the opposite side of the spectrum, major support is located at $180.00.

A price recovery may prove elusive in the short-term, with the Relative Strength Index (RSI) and Stochastic indicator signalling weak underlying momentum.

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Despite its recent decline, ethereum’s value has surged more than 2,200% this year.

Cyber Attacks, SEC Weigh on Market

The ethereum network suffered a large-scale cyber breach earlier this month resulting in the loss of tens of millions of dollars. A community of ethical hackers quickly banded together to “rescue” hundreds of millions of dollars worth of tokens.

Blockchain-based trading platform Coindash was also hijacked during an initial coin offering (ICO). The breach exposed Coindash’s ether wallet address, resulting in the loss of $7 million worth of ether.

The Securities and Exchange Commission (SEC) has also taken an interest in the ethereum-based ICO market. Last week, the regulator concluded that a certain multi-million dollar token sale last year violated securities law. Although ICOs have been compared to crowd-sourcing, the SEC maintained that some tokens were in fact securities.

Analysts say the SEC ruling could impact the future of ICOs, although it remains unclear how the regulator is pursuing this market. The SEC’s July 25 press release cautions investors about ICOs in general.

ETH/USD (Bitfinex)


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