Hacker threatens banks to extort Bitcoins

Three Israeli banks have received threats that unless they hand over a sum in Bitcoins, customers' details will be exposed.

Sources inform "Globes" that, a few days ago, Israel Discount Bank (TASE: DSCT), First International Bank of Israel (TASE: FTIN) and Bank Yahav for Government Employees Ltd., controlled by Mizrahi Tefahot Bank (TASE:MZTF), received an e-mail message threatening that unless they handed over a certain sum in Bitcoins by the end of next week, a list of customers' details would be given to hostile elements. The person issuing the threat claimed to have details of 3.7 million bank customers.

The Bank of Israel, Discount Bank, First International, and Yahav declined to comment on the report. Sources at some of the banks say that they do not see the threat as serious. The banks did however report it to the Bank of Israel and the police.

The Bank of Israel held a meeting on the matter yesterday with representatives of the banks, following which Supervisor of banks David Zaken wrote to all the banks with a list of steps they should take if threatened in this way. In his letter, Zaken writes that the bank should inform the Bank of Israel and the police if it receives a threat of this kind, and consider whether to respond to the threat, coordinating any response with the Bank of Israel, since a response by one bank could affect the entire banking system. In any event, the Bank of Israel asks the banks to be prepared for possible publication of customers' details.

In the threatening message, the anonymous writer says that he operates a botnet network in Israel. This is a network of computers with spy software that can hack into customers' computers and extract details such as account number, passwords, and credit card details. The break-in is into customers' computers, not the banks' severs.

The demand to receive Bitcoins stems from the fact that it is a virtual currency, unrecorded and untraceable when converted, so that the hacker can disappear with the money he receives, and then convert it to any currency he wants, making it easy to launder.

Public awareness of the cyber threat is not high, as, fortunately, there have been hardly any cyber break-ins to accounts of customers of Israeli banks. The last occurrence was nearly two years ago, when Saudi hackers exposed credit card details of Israelis.

Nevertheless, the banks and the Bank of Israel see the cyber risk as a main threat. Cyber attacks are becoming more and more advanced and sophisticated. This is no longer the age of the computer genius who sits at home and tried to plant viruses and break into customers' bank accounts. According to information security industry sources, there are companies in certain countries whose aim is to develop new and more sophisticated ways of breaking into bank accounts without the bank spotting and thwarting them.

Yesterday, on a panel of bank heads at a conference held by the Institute of Certified Public Accountants in Israel, Bank Leumi chairman David Brodet said, "The risk I fear today is the cyber risk. There are countries that seek to damage infrastructures in Israel, and the banks are considered to be at risk." The Bank of Israel has also warned more than once of the cyber threat to the banks. It has set up a specialized cyber unit in the Banking Supervision Department, and a year ago it urged the banks to expedite their preparations for a cyber attack.

Published by Globes [online], Israel business news - www.globes-online.com - on December 18, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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