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On November 9, trades handled by the world’s largest bank in the globe’s biggest market reportedly traversed Manhattan on a USB stick. This was as the Industrial & Commercial Bank of China (ICBC) Ltd’s US unit was hit by a cyberattack, rendering it unable to clear swathes of US Treasury trades after entities responsible for settling the transactions swiftly disconnected from the hacked systems.According to a report in Bloomberg, this forcedICBC to send the required settlement details to those parties by a messenger carrying a thumb drive. The attack caused disruption as market-makers, brokerages and banks were forced to reroute trades.
ICBC confirmed the breach in a statement that a ransomware attack at its ICBC Financial Services unit disrupted some of its systems. The bank further said it’s conducting a thorough investigation and progressing its recovery efforts. “We are aware of the cybersecurity issue and are in regular contact with key financial sector participants, in addition to federal regulators. We continue to monitor the situation,” a spokesman for the US Treasury Department said in an emailed statement to Bloomberg.
The online attack on the bank is said to be orchestrated by the ransomware group Lockbit. This is the same group that is also said to be behind the hacking attacks that hit Boeing Co., ION Trading UK and the UK’s Royal Mail.
What ICBC hacking highlights
The incident is said to have highlighted the dangers that bank executives concede keeps them up at night — the prospect of a cyber attack that could someday cripple a key piece of the financial system’s wiring, setting off a cascade of disruptions.
One US brokerage reportedly received an email from a broker who clears trades through the ICBC saying that the bank couldn’t connect to the Depository Trust and Clearing Corporation amid an issue clearing trades and that customers should expect delays. Central clearing platforms are intermediaries between buyers and sellers that assume responsibility for completing transactions and therefore prevent the default of one counterparty from causing widespread problems in the marketplace.
According to the report, “in 2016, an examination of the malware used in an attack on Vietnam’s Tien Phong Commercial Joint Stock Bank showed that unique Swift codes identifying at least seven additional financial institutions were embedded in the hackers’ work. They included the New York and Hanoi branches of ICBC. The malware wasn’t used to attack those banks — rather, it deleted money-transfer confirmations sent between the Vietnamese bank and its partners that could have alerted bank officials of improper transactions.”
ICBC confirmed the breach in a statement that a ransomware attack at its ICBC Financial Services unit disrupted some of its systems. The bank further said it’s conducting a thorough investigation and progressing its recovery efforts. “We are aware of the cybersecurity issue and are in regular contact with key financial sector participants, in addition to federal regulators. We continue to monitor the situation,” a spokesman for the US Treasury Department said in an emailed statement to Bloomberg.
The online attack on the bank is said to be orchestrated by the ransomware group Lockbit. This is the same group that is also said to be behind the hacking attacks that hit Boeing Co., ION Trading UK and the UK’s Royal Mail.
What ICBC hacking highlights
The incident is said to have highlighted the dangers that bank executives concede keeps them up at night — the prospect of a cyber attack that could someday cripple a key piece of the financial system’s wiring, setting off a cascade of disruptions.
One US brokerage reportedly received an email from a broker who clears trades through the ICBC saying that the bank couldn’t connect to the Depository Trust and Clearing Corporation amid an issue clearing trades and that customers should expect delays. Central clearing platforms are intermediaries between buyers and sellers that assume responsibility for completing transactions and therefore prevent the default of one counterparty from causing widespread problems in the marketplace.
According to the report, “in 2016, an examination of the malware used in an attack on Vietnam’s Tien Phong Commercial Joint Stock Bank showed that unique Swift codes identifying at least seven additional financial institutions were embedded in the hackers’ work. They included the New York and Hanoi branches of ICBC. The malware wasn’t used to attack those banks — rather, it deleted money-transfer confirmations sent between the Vietnamese bank and its partners that could have alerted bank officials of improper transactions.”
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