Central Banks under Attack by Hackers

There is a new reason for everybody to be scared to death of cyberwarfare; the world’s central banks; the entities that manipulate the economy, are under attack by hackers. Both the Central Bank of Russia and the Saudi Arabian Monetary Agency got hit by cyberattacks in a little over a month.

Unidentified hackers managed to steal more than two billion rubles ($31 million USD) from Russia’s Central Bank, the International Business Times (IBT) reported. Disturbingly bank officials will not admit much was taken but it might have been as much as five billion rubles ($80 million USD).

The Saudi attack was far more disturbing; state-sponsored attackers used the disk wiping malware Shamoon to destroy data at the Monetary Agency, Bloomberg and IBT reported on November 3. The full extent of attack was not revealed but Bloomberg Technology reported that several Saudi government agencies were hit.

Has the Cyberwar between Iran and Saudi Arabia Begun?

Somebody within the Iranian government was probably behind the attack security experts told Bloomberg. The speculation is that the Iranians are targeting US allies to send a message to President Elect Donald Trump who has been very critical of their government.

The Saudi Arabian Monetary Agency.
The Saudi Arabian Monetary Agency.

Extensive damage was caused to systems at four unidentified Saudi government agencies, Bloomberg reported. Officials were shocked by the ferocity of the attack, but security measures were able to contain it.

The attack might have been Iran’s effort to send a message to the Saudi royal family to pressure Trump or to pull out of a new OPEC oil deal. This is the second time Shamoon has been used against Saudi Arabia. It was used to infect computer networks there in 2012.

Shamoon is a particularly nasty cyber weapon that destroys a computer’s master boot record. It was also used against Sands Corp, the company of Las Vegas casino magnate and Trump backer Sheldon Adelson in 2014. Adelson is an outspoken critic of Iran and a supporter of Israel.

Did the CIA Hack Russia’s Central Bank?

The cyber thieves who hit the Central Bank of Russia have not been identified. They managed to get into the system by faking depositors’ credentials and started emptying out accounts. Even if the Russian attack was plain old fashioned theft it is still an act of cyberwarfare.

An interesting suspect in the Russian attack is the CIA. Back on October 14, 2016, NBC News reported that President Obama had ordered the agency to prepare for covert cyber action against Russia in interference in retaliation for interference in the US presidential election.

The Central Bank of Russia
The Central Bank of Russia

The unconfirmed report did not say what the action would be it was clear that Russian President Vladimir Putin was a target. Unidentified sources described as “intelligence officials” claimed that the White House wanted to harass and embarrass Kremlin leaders with clandestine cyber operations it sounds as if somebody has done just that.

Has the Cyberwar Begun?

It looks as if cyberwar is breaking out among various world powers. Such warfare should scare us because it has the potential to create economic chaos. If hackers were able to shut down a central bank they might be able to totally disrupt a nation’s economy.

There are many ways hackers could use Central Banks to disrupt an economy. An obvious one would be to start dumping unlimited amounts of debt on the market. Another would be to start buying up unlimited amounts of debt. Either scenario might trigger inflation or overheat the markets. Even a simple action like sending out a fake press release stating that the bank was about to raise interest rates would wreak havoc in the market.

An even more frightening strategy would be to create bank runs by emptying out thousands or millions of accounts at once. That might lead to chaos as millions of panicked investors try to withdraw all their cash at once.

How to Stop Cyberwarfare

We must understand that this new breed of hacking is economic warfare that might threaten everybody not just Central Banks. The world’s leaders need to come together and do something about it before average people are hurt.

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One obvious solution would be an international treaty banning cyberwarfare. Since we already have treaties banning chemical weapons, biological weapons and landmines this is not a stretch.

Another potential answer is an international cybersecurity organization modeled on the World Health Organization (WHO) that entity would fight cyber weapons in the same way that WHO fights disease.  Since WHO successfully eradicated smallpox the approach is a proven one.

The world’s leaders need to get serious about cyberwarfare before it becomes a threat to our economy. If they do not many innocent people will be hurt by this scourge.