Swift – Cyber Law Watch

SWIFT’s assessment of Distributed Ledger Technologies

May 01 2016

By Cameron Abbott and Giles Whittaker

SWIFT and Accenture released their new paper into how Distributed Ledger Technologies (DLTs) could be used in financial services. The outcome of their assessment highlighted 8 key gaps between industry requirements and the current DLT solutions. The 8 critical factors to be addressed before widespread adoption of DLT’s include:

strong governance;
data controls;
compliance with regulatory requirements;
standardisation;
identity framework;
security and cyber defence;
reliability; and
scalability.

The potential use of these technologies is still unclear according to Fabian Vandenreydt the Head of Securities, Innotribe and the SWIFT Institute. However SWIFT has committed to working with the industry to identify areas in which the technology can provide the greatest benefit.

For more information about SWIFT’s position on DLTs or to download a copy of the paper visit here.

Bangladesh Bank considers legal action against the NY Fed in Hollywood-esque hack

Mar 31 2016

By Cameron Abbott and Simon Ly

In a story that would make an excellent plot to a sequel to Ocean’s 13, the Federal Reserve Bank of New York has been the target of a successful major cyber hack. Part of the targeted attack was an attempt to steal nearly $1 billion from Bangladesh Bank’s account.

If anyone would be well protected it would be the NY Fed, right? Well, while they were able to block some 30 transactions, 5 were successful, resulting in $81 million being stolen from Bangladesh Bank’s account.

The NY Fed has released a statement outlining that its systems were not breached, but instead pointing to SWIFT, a member-owned cooperative relied upon by banks to authenticate international monetary transactions. In response, a SWIFT representative stated that it “reiterates that the SWIFT network itself was not breached”. For its part, the NY Fed agreed that it “viewed this as a major lapse on the part of FRB NY”.

It will be fascinating to see how this he-said she-said blame game plays out. The current state of events is that the Bangladesh Bank is engaging legal counsel to establish grounds for recompense.

It goes without saying that these mind boggling figures and the nature of the attack emphasise that no one is immune from attacks. Next time someone tells you that it can’t happen to your organisation – remember this example.

For more information, please see Bloomberg’s report here.

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