Iran Pays $Mulitmillion Ransom To Protect Its Banks

Uploaded on 2024-09-20 in TECHNOLOGY--Hackers, INTELLIGENCE-Hot Spots-Iran, GOVERNMENT-National, FREE TO VIEW

A massive cyber attack that hit Iran recently threatened the stability of its banking system and forced the country's regime to agree to a ransom deal of millions of dollars, according to official sources. Analysis say this attack becomes one of the largest breaches that the country has faced in its cyber history.

A group known as IRLeaks, which has a history of hacking Iranian companies, was likely behind the breach, the officials said.

The hackers are said to have initially threatened to sell the data they collected, which included the personal account and credit card data of millions of Iranians, on the Dark Web unless they received $10 million in crypto-currency, but later settled on a smaller sum.

Iran’s highly centralised religious regime is understood to have pushed for the ransom to be paid, fearing that word of the data theft would destabilise the country’s weak financial system, which is under intense strain amid the international sanctions the country faces.

Iran has not acknowledged the breach, which forced banks to shut down cash machines across the country in August.Though the attack was reported at the time by Iran International, an opposition news outlet, neither the suspected hackers nor the ransom demands were disclosed. Iran’s supreme leader, Ayatollah Ali Khamenei, delivered a cryptic message in the wake of the attack, blaming the US and Israel for “spreading fear among our people,” without acknowledging the country’s banks were under assault.

“The enemy’s goal is to spread psychological warfare to push us into political and economic retreat and achieve its objectives,” the Ayatollah said.

That accusation seemed plausible given the broader tensions between Israel, the US and Iran. While Tehran blames Israel for the recent assassination of a senior Hamas leader in Iran, Washington accuses Iran of trying to influence the US election by hacking into Donald Trump’s campaign operation.

Online extortion in Iran is nothing new. In December, IRLeaks claimed to have stolen the customer data of nearly two dozen Iranian insurance companies, and of hacking into Snapp Food, a delivery service. Though the companies agreed to pay ransom to IRLeaks, it was far less than the group received from the banking hack.

IRleaks entered the banks’ servers via a company called Tosan, which provides data and other digital services to Iran’s financial sector. Using Tosan as a Trojan horse, the hackers appear to have exfiltratd data from both private banks and Iran’s central bank. Of Iran’s 29 active credit institutions, as many as 20 were hit, said the officials, who requested anonymity in order to reveal sensitive information. Among the affected banks were the Bank of Industry and Mines, Mehr Interest-Free Bank, Post Bank of Iran, Iran Zamin Bank, Sarmayeh Bank, Iran-Venezuela Bi-National Bank, Bank Day, Bank-e Shahr, Eghtesad Novin Bank, and Saman, which also has branches in Italy and Germany.

The government ultimately insisted that Tosan to pay the IRLeaks ransom, a personal familiar with the events said. What isn’t clear is whether the hackers used Tosan to hit other targets in Iran. The firm has a wide customer base, including government entities beyond the central bank.

Iran’s financial sector has long been the country’s Achilles heel and its banks are undercapitalised and overburdened with by loans they are forced to make to the government, which counts as the sector’s biggest borrower. In February, Iran’s central bank chief said that eight of the country’s banks were facing severe difficulties and would either be merged or dissolved.

Iranian citizens have little choice but to continue to keep their money in their local banks and rely on them to handle their daily transactions in cash, and with an inflation rate of nearly 40 percent, Iranians have shown little appetite for digital payments.

The banking system’s overall fragility leaves individual lenders exposed to sudden bank runs. That danger might explain why the regime refused to publicly acknowledge the attack and pressured Tosan to pay the hackers.

Image: Ideogram

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