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Do banks get hacked very often? They seem to have their security in order. Probably because they would have to reimburse their customers if something went wrong

Do banks get hacked very often? They seem to have their security in order. Probably because they would have to reimburse their customers if something went wrong.

ehnto 4y ago
I imagine they do their best to run a tight ship yes, but I also imagine the fact that banks still run a lot of legacy pipelines and audits means it's also a little harder to find bugs in the apps and websites, that would actually let you achieve much.
themihai 4y ago
When the banks get bankrupt (i.e due overleverage, stealing/using customer's money etc) their customers get nothing back. A such example is MF Global. I'm not going into the whole story why banks and centralised/opaque finance is bad. Now the whole point of crypto was the tech behind it which was supposed to replace banks, exchanges and missuse of your OWN money. It's supposed to be an alternative to the trash financial tools we already use. The fact that people are using entities such FTX, Binance makes them deserve to be punished for their betrayal. Regardless if they use FTX or JP Morgan they pretty much deserve to experiment the shortfalls of centralised finance. I think it's part of the hello world example of what DeFi is trying to solve. One more thing: If FTX was hacked I bet it has almost nothing to do with the crypto technology. https://en.m.wikipedia.org/wiki/MF_Global https://en.m.wikipedia.org/wiki/MF_Global
- fieldcny 4y ago
  MF Global wasn’t a bank. “Nothing to do with the crypto technology” is an empty and meaningless statement. IF, and that’s a very big if, they got hacked, the fact that $600m could be moved and disappeared so quickly is 100% to do with the “crypto technology”. In the real financial system it is exponentially harder to make money disappear, transfers are logged on three sides of the transaction, you have to hack multiple autonomous and different tech stacks, and you have to wait as the transfers get transmitted, validated and passed in.
- awinder 4y ago
  “In January 2013, a judge approved a settlement that would return 93 percent of customers' investments” A great deal larger than nothing.
- deleted 4y ago
  [deleted]
- throwaway2037 4y ago
  You wrote: <<their customers get nothing back>> Another comment already noted that MF Global was not a (commercial/retail) bank. One part of it was a broker-dealer. Also, in the United States customers of MF Global brokerage were covered by the Securities Investor Protection Corporation (SIPC) which (to quote Wiki): <<can pay the customer (via its trustee) up to $500,000 for missing equity, including up to $250,000 for missing cash>>. Please read more here: https://en.wikipedia.org/wiki/Securities_Investor_Protection_Corporation https://en.wikipedia.org/wiki/Securities_Investor_Protection... Even with all of the bad behaviour during MF Global's last days (to quote Wiki again): <<In January 2013, a judge approved a settlement that would return 93 percent of customers' investments, with the prospect of additional payouts from the company's general estate.>> Impressive, considering the extent of fraud at MF Global! Can any collapsed crypto exchange claim the same recovery rate? I doubt it.
jnwatson 4y ago
I have direct knowledge of several bank hacks. Most of the time they don’t publish it.
- xeromal 4y ago
  Isn't the difference that banks have insurance for those hacks?
  - drewmol 4y ago
    Yes banks have fidelity bonds called bankers blanket bonds (BBB) which cover losses from fraud, theft, etc. The FDIC doesn’t ensure against robbery, identity theft(banking fraud), etc. so this is an important protection for banks to provide.
    - xeromal 4y ago
      Ah! I had no idea FDIC didn't cover robbery. Thanks for clarifying!
      - selecsosi 4y ago
        They will cover the depositor's funds up to the 250k limit in the event of an event where the bank cannot return your funds, but banks assets or property is not covered under FDIC and need to be separately insured.

Do banks get hacked very often? They seem to have their security in order. Probably because they would have to reimburse their customers if something went wrong.

ehnto 4y ago

I imagine they do their best to run a tight ship yes, but I also imagine the fact that banks still run a lot of legacy pipelines and audits means it's also a little harder to find bugs in the apps and websites, that would actually let you achieve much.

themihai 4y ago

When the banks get bankrupt (i.e due overleverage, stealing/using customer's money etc) their customers get nothing back. A such example is MF Global. I'm not going into the whole story why banks and centralised/opaque finance is bad. Now the whole point of crypto was the tech behind it which was supposed to replace banks, exchanges and missuse of your OWN money. It's supposed to be an alternative to the trash financial tools we already use. The fact that people are using entities such FTX, Binance makes them deserve to be punished for their betrayal. Regardless if they use FTX or JP Morgan they pretty much deserve to experiment the shortfalls of centralised finance. I think it's part of the hello world example of what DeFi is trying to solve. One more thing: If FTX was hacked I bet it has almost nothing to do with the crypto technology. https://en.m.wikipedia.org/wiki/MF_Global https://en.m.wikipedia.org/wiki/MF_Global

fieldcny 4y ago
MF Global wasn’t a bank. “Nothing to do with the crypto technology” is an empty and meaningless statement. IF, and that’s a very big if, they got hacked, the fact that $600m could be moved and disappeared so quickly is 100% to do with the “crypto technology”. In the real financial system it is exponentially harder to make money disappear, transfers are logged on three sides of the transaction, you have to hack multiple autonomous and different tech stacks, and you have to wait as the transfers get transmitted, validated and passed in.
awinder 4y ago
“In January 2013, a judge approved a settlement that would return 93 percent of customers' investments” A great deal larger than nothing.
deleted 4y ago
[deleted]
throwaway2037 4y ago
You wrote: <<their customers get nothing back>> Another comment already noted that MF Global was not a (commercial/retail) bank. One part of it was a broker-dealer. Also, in the United States customers of MF Global brokerage were covered by the Securities Investor Protection Corporation (SIPC) which (to quote Wiki): <<can pay the customer (via its trustee) up to $500,000 for missing equity, including up to $250,000 for missing cash>>. Please read more here: https://en.wikipedia.org/wiki/Securities_Investor_Protection_Corporation https://en.wikipedia.org/wiki/Securities_Investor_Protection... Even with all of the bad behaviour during MF Global's last days (to quote Wiki again): <<In January 2013, a judge approved a settlement that would return 93 percent of customers' investments, with the prospect of additional payouts from the company's general estate.>> Impressive, considering the extent of fraud at MF Global! Can any collapsed crypto exchange claim the same recovery rate? I doubt it.

jnwatson 4y ago

I have direct knowledge of several bank hacks. Most of the time they don’t publish it.

xeromal 4y ago
Isn't the difference that banks have insurance for those hacks?
- drewmol 4y ago
  Yes banks have fidelity bonds called bankers blanket bonds (BBB) which cover losses from fraud, theft, etc. The FDIC doesn’t ensure against robbery, identity theft(banking fraud), etc. so this is an important protection for banks to provide.
  - xeromal 4y ago
    Ah! I had no idea FDIC didn't cover robbery. Thanks for clarifying!
    - selecsosi 4y ago
      They will cover the depositor's funds up to the 250k limit in the event of an event where the bank cannot return your funds, but banks assets or property is not covered under FDIC and need to be separately insured.