Since day-to-day financial operations have moved online, Wall Streeters have grown increasingly concernedabout the safety of their data. While most hacks are for gathering information and espionage, one well-executed cyberattack could bring down the entire structure of the financial system.
Four years ago, a Russian cyber hack on Nasdaq proved just how vulnerable Wall Street is.
Bloomberg Businessweek dove into the details in its cover story, “The Nasdaq Hack.” According to the magazine, it all started in October 2010, with the discovery of malware in NASDAQ’s central servers. Most alarming, the malware was an attack code, a military strike, from another country.
The National Cybersecurity and Communications Integration Center launched a five-month investigation, of which many details are still classified. In the following investigation, the NSA recognised the malware from a previous version, built by Russia’s main spy agency. However, this time it was much more dangerous — it had the ability to disrupt the entire network, potentially to wipe out Nasdaq altogether.
The next step was tracing the attack back to the source. The search revealed the tracks of several other hacker groups within the system. Even worse, trying to track the attack brought attention to the unpreparedness of other large financial institutions.
“The agents found little evidence of a broader attack. What they did find were systematic security failures riddling some of the most important U.S. financial institutions. It turned out that many on the list were vulnerable to the same attack that struck Nasdaq. They were spared only because the hackers hadn’t bothered to try.”
Officials ran through potential motives for the cyber hack: profit, destruction, sabotage. By 2011, they had concluded that Russia wanted to imitate the Nasdaq exchange, and used the hack to collect information for their own stock exchanges, Micex and RTS. When asked about the attack, Russian Embassy spokesman Yevgeniy Khorishko said, “It is pure nonsense that it is not even worth commenting on.”
The hack was disrupted, and further research showed the malware wasn’t as dangerous as initially believed. However, the discovery of this weakness in Nasdaq also exposed how ill-equipped the rest of the country was to deal with any future threats.
Bloomberg summed up the fear inspired by the 2010 attack:
For some U.S. officials, however, the lessons of the incident are far more chilling. The U.S. national security apparatus may be dominant in the physical world, but it’s far less prepared in the virtual one. The rules of cyberwarfare are still being written, and it may be that the deployment of attack code is an act of war as destructive as the disabling of any real infrastructure. And it’s an act of war that can be hard to trace: Almost four years after the initial Nasdaq intrusion, U.S. officials are still sorting out what happened. Although American military is an excellent deterrent, it doesn’t work if you don’t know whom to use it on.