Europe’s Largest Airline Falls Prey to $5 Million Cyber-Theft
by Mark O’Byrne, Gold Core
– Europe’s largest airline says $5 million (€4.5m) taken from bank accounts
– Ryanair confirms hackers stole via Chinese bank
– Cash siphoned from one of its bank accounts
– Allegation that robbed in Chinese banking scam
– Hackers transfer $5 million from a Ryanair dollar account to Chinese bank
– Highlights growing risks of cyber-crime and lack of protection
– Cyberattacks as the “New Cold War” and risk to all our wealth
– Cash no longer king – deposits more risky due to cyber-crime
Europe’s largest airliner in terms of passengers, Ryanair, has had $5 million siphoned from one of its bank accounts. It is alleged that Ryanair were hacked by cyber-criminals and had the cash illegally transferred to a bank account in China.
Cyber thieves managed to initiate a single fraudulent transaction using a Chinese bank when stealing the money from the airline according to reports. The hacked account held dollars which the Irish company uses for fuel purchases.
In a statement Ryanair said the following:
“The airline has been working with its banks and the relevant authorities and understands that the funds – less than $5 million – have now been frozen.”
“The airline expects these funds to be repaid shortly, and has taken steps to ensure that this type of transfer cannot recur.”
Although the sum stolen was relatively small in corporate terms and appears to have been tracked and frozen quite quickly, the incident – yet again – highlights the threat posed by cybercrime to today’s banking and financial systems.
Legislation to deter cyber-theft is only as effective as the means to enforce it. It is a relatively new phenomenon that a theft could be committed without the thief having to set foot in the jurisdiction from where the asset is stolen.
If the perpetrators are above the law or reside in a different jurisdiction legislation is not an effective deterrent.
In February, we covered how Moscow based cyber security firm Kaspersky Lab had uncovered the operations of an international group of cyber criminals who stole up to $1 billion from “over 100 banking and financial institutions in 30 different countries across the world”.
To date, there appears to have been no progress in identifying the hackers demonstrating the comfort and impunity with which very savvy cyber-thieves can operate.
Guy Haselmann from Scotiabank has described cyber attacks as the “New Cold War.” In his piece “The Invisible Enemy” he refers to President Obama’s recent State of the Union address where he described “foreign cyber-threats as a ‘national emergency’.”
Obama said that the “if the US government does not improve cyber defenses, we leave our nation and our economy vulnerable”.
Haselmann goes on to suggest that warfare ideology has moved from the insane doctrine of Mutually Assured Destruction (MAD) through nuclear weaponry to “Multilateral Unconstrained Disruption” – MUD.
“This unrestricted warfare”, he says, “is meant to disrupt societal functioning; to ‘poison’ information to elevate distrust of all computer information.”
That governments are involved in this type of warfare is beyond dispute. We previously covered how a broad spectrum of countries had perpetrated cyber-attacks against their rivals.
The outcomes of such attacks, while not on a par with a nuclear holocaust, should not be taken lightly. It is believed that the deployment of the stuxnet virus by the U.S. and Israel against an Iranian nuclear facility almost caused a major environmental catastrophe.
Trojan malware, apparently of Russian origin, was found in on Nasdaq’s central servers which was capable, according to the NSA, of “wiping out the entire exchange”. The knock-on effects of such an action would likely have led to stock market crashes, recession and possibly depressions and social upheaval across the world.
The new cold war may indeed be one of cyber-warfare. If so we can expect an escalation of such attacks should relations between Washington and NATO and Russia, Iran and other Middle Eastern nations deteriorate further.
The fact that cyber theft can occur demonstrates the abstract nature of modern currency. By manipulating digits on a computer screen and through hacking, wealth can be transferred from one part of the world to another and from one bank account to another.
The means to acquire goods and services is now almost entirely determined by an intangible and virtual medium of exchange. This renders cash little better than crypto currency, although in theory crypto currency should not and cannot be printed and electronically created with reckless abandon as is happening to the dollar, euro, pound and other paper and electronic currencies today.
The risks posed by cyber-crime, cyber-warfare and cyber-terrorism to this type of monetary system should not be underestimated.
If the system were to become severely compromised or even collapse – through cyber-attacks or any of the myriad risks to the system that exist today – it is highly likely that in the ensuing panic gold and silver buying, prices would surge to levels never seen before.
That would see gold and silver rise well above the inflation adjusted record highs or real record highs above $2,500 per ounce and $150 per ounce.
Owning physical gold in segregated, allocated accounts is essential financial insurance to protect wealth today.
Important Guide: 7 Key Gold Storage Must Haves
Today’s AM LBMA Gold Price was USD 1,204.80, EUR 1,095.45 and GBP 783.99 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,201.40, EUR 1,100.56 and GBP 788.17 per ounce.
Gold climbed 0.82 percent or $9.80 and closed at $1,212.20 an ounce yesterday, while silver rose 1.4 percent or $0.23 closing at $16.61 an ounce.
In Asia overnight, Singapore gold prices ticker marginally lower and hovered at $1,209 an ounce near the end of day trading after gaining almost 3 percent the two previous trading sessions. Gold eked out small gains this morning to trade to its highest price in three weeks as a weak U.S. data and a weak dollar have lowered expectations for a U.S. interest rate hike in June.
Today’s focus will primarily be on the U.S. Federal Open Market Committee statement at 1900 GMT and the U.S. GDP data out earlier at 1330 GMT.
Most analysts are expecting a dovish statement from the Fed especially if the GDP data published today is weak. A softer dollar will should help the yellow metal’s safe haven appeal and boost prices.
China’s gold bullion imports from Hong Kong fell this March to its lowest level in seven months. Q1 saw a 9 percent fall in Chinese physical gold buying cited an industry report. Although demand as seen on the Shanghai Gold Exchange withdrawals remains near record highs.
Iran and the U.S. Navy appear poised for a battle that could degenerate into another theatre of war in the Middle East.
Yesterday, a cargo ship was shot at, boarded and confiscated by Iranian naval forces and taken to the Persian Gulf port of Bandar Abbas, on the Strait of Hormuz. 34 sailors on board the vessel are American, although U.S. officials later said that the ship, bearing the flag of the Marshall Islands, has no American sailors on board.
Iran’s FARS news agency said the vessel had been detained “for trespassing in Iran’s territorial waters.” The Pentagon said the action was “provocative.”
Some 17 million barrels per day – about 30 percent of all seaborne-traded oil – passed through the Straits of Hormuz in 2013, according to the US Energy Information Administration.
Just last week, the president directed the USS Theodore Roosevelt to the Gulf of Aden to “ensure the freedom of navigation” through its strait, US officials said, as Iranian ships approached Yemen’s shores.
Geopolitical risk remains underestimated by markets. There are a number of geopolitical Black Swans out there – from the Ukraine to the Middle East which could flare up and be the catalyst for the next stage of gold’s bull market.
Gold in late morning trading in London is down 0.53 percent at $1,205.28 an ounce. Silver is off 0.83 percent at $16.46 an ounce while platinum has dipped 0.32 percent at $1,151.49 an ounce.
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