Outrageous! Sri Lanka's Ministry of Finance loses $2.5 million to theft, four civil servants suspended pending investigation

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The Sri Lankan Ministry of Finance has been hacked. An attack that broke out in January this year involved tampering with email payment instructions to steal $2.5 million in sovereign debt repayments that were supposed to be remitted to Australia. The incident was exposed after the Australian creditor failed to receive the funds. Four civil servants have been suspended, and Sri Lanka is working with Australia to track the funds. (Previous coverage: Sri Lanka bankrupt, humanitarian catastrophe! Protesters storm official residence, President reportedly flees, Prime Minister announces resignation) (Background: Solana protocol Loopscale hacked for $5.8 million, official: working to recover) It is reported that hackers infiltrated the Ministry of Finance's computer system in January this year and successfully stole $2.5 million (approximately £1.8 million) in sovereign debt repayment funds. A national-level cyber intrusion has broken out in Sri Lanka! Ministry of Finance Secretary Harshana Suriyapperuma told the media on Thursday that the funds were originally intended to repay bilateral debt to Australia. The incident was exposed only after the Australian creditor proactively raised questions upon failing to receive the payment. Investigators currently believe this was a Business Email Compromise (BEC) type of attack. After infiltrating the Ministry of Finance's email system, the hackers tampered with the beneficiary account information during the sovereign debt payment process, diverting the $2.5 million that was supposed to be sent to Australia into other accounts. Suriyapperuma said: "Sri Lanka made the payment on time, but cybercriminals intercepted it and diverted the funds to other bank accounts instead of the intended recipient." Deputy Minister of Finance Anil Jayantha Fernando added that the full scale of the incident only emerged when the hackers attempted to repeat the same method for another repayment to India. How the hackers breached the multiple lines of defense in the Ministry of Finance's system is still under investigation. Officials stated that they are seeking assistance from multiple overseas law enforcement agencies. Suriyapperuma stated that four senior officials from the Public Debt Management Office have been suspended. The investigation is focusing on clarifying why the control mechanisms at various levels failed and whether there is any possibility of recovering the stolen funds. Australian High Commissioner to Colombo Matthew Duckworth confirmed on X that Canberra is aware of the payment anomaly and stated: "Sri Lankan authorities are investigating the matter and are coordinating with Australian officials who are providing assistance." This intrusion occurred during Sri Lanka's most vulnerable recovery period. Four years ago, Sri Lanka suffered a severe foreign exchange crisis; the depletion of foreign exchange reserves led to severe shortages of food, fuel, and medicine. Colombo subsequently defaulted on $46 billion (approximately £34 billion) in external debt, and large-scale protests eventually toppled then-President Gotabaya Rajapaksa in July 2022. In the years since, Sri Lanka has continued to push forward with debt restructuring and fiscal consolidation. This $2.5 million repayment to Australia was a component of the restructuring arrangement. The theft is not only a financial loss but also a heavy blow to the Sri Lankan government, which is in the process of rebuilding its sovereign credit.

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