Blockchain to the rescue! Hackers attack Ukrainian bank's SWIFT network again, steal hundreds of millions of dollars

Banks are in urgent need of blockchain-based money transfer solutions as traditional systems are experiencing frequent breaches. The SWIFT network, which is widely used by banks around the world for electronic fund transfers, has recently suffered multiple hacker attacks that have resulted in large amounts of money being stolen.

Shortly after hackers recently stole Bangladesh Central Bank funds from the Federal Reserve, a Ukrainian bank has become a target of hackers. An unnamed Ukrainian bank has reportedly lost $10 million after hackers broke into its computer systems. The funds were then transferred to overseas accounts using the SWIFT bank transfer system.

The bank has asked members of the Information Systems Audit and Control Association Systems Audit and Control Association to investigate the hack and repair any damage that the hackers may have done to the bank's systems. In a statement to a Ukrainian news website, the investigators mentioned that the attack was not an isolated incident and that many banks in the region were also hit by such hackers.

The investigators noted:

“As it stands now, dozens of banks, mostly in Ukraine and Russia, have been compromised and hundreds of millions of dollars have been stolen from them… The banks are not willing to share this information and are afraid to go public.”

Currently, there is not enough data to determine the number of banks that have been hacked or the amount of funds stolen from those banks because they are afraid of losing the trust of their customers if the incident is made public.

On the other hand, SWIFT has also been working on improving the security of its network. But it will take time before the security of the inter-bank fund transfer network is upgraded. The R3 blockchain banking consortium is currently working on a blockchain-based network to replace SWIFT. Once this network is developed, R3's partner banks will be able to transfer funds on a private blockchain.

Many banks prefer applications based on private blockchains over public blockchains, which creates another problem. The security of a blockchain is directly proportional to the number of miners on the blockchain network. Private chains limit the number of network members, which makes the underlying infrastructure vulnerable to attacks.

Until SWIFT upgrades its security, the only solution for banks to prevent future hacker attacks is to upgrade their own security and ensure that banking systems are not affected. The banking industry should also focus on implementing secure blockchain fund transfer solutions in the shortest possible time.