Cyberattack on C&M Software hits Brazilian financial industry

The Brazilian financial industry is grappling with the aftermath of a significant cyberattack on C&M Software, a crucial technology provider connecting financial institutions to the Central Bank’s widely used PIX instant payment system. The breach, which came to light this week, resulted in the unauthorized diversion of over R$540 million (approximately $100 million USD) from several reserve accounts.

Brazilian authorities have moved swiftly, arresting an IT employee of C&M Software, João Roque, who allegedly sold his corporate credentials to the attackers. Investigators believe Roque received R15,000fortheinitialaccessandafurtherR10,000 to execute commands within the system. This insider compromise underscores a critical vulnerability in the cybersecurity landscape.

The Central Bank of Brazil, while confirming that its own systems were not directly compromised, immediately ordered C&M Software to suspend access for all financial institutions to its affected infrastructure to contain further damage. This led to a temporary disruption of some PIX-related services for institutions reliant on C&M.

Among the affected entities, financial institution BMP confirmed that it and five other institutions experienced unauthorized access to their reserve accounts, which are held directly with the Central Bank for interbank settlements. Crucially, officials have reassured the public that client accounts and individual balances were not impacted by the breach.

On-chain analysis by crypto detective ZachXBT suggests that a significant portion of the stolen funds, estimated between $30 million and $40 million, was quickly converted into cryptocurrencies like Bitcoin, Ethereum, and Tether through Latin American over-the-counter (OTC) desks and exchanges. This highlights the growing challenge for law enforcement in tracing and recovering illicit funds moved through decentralized digital assets.

C&M Software has stated that it is fully cooperating with the ongoing investigation by the Central Bank and São Paulo state police. The company asserts that preliminary evidence points to unauthorized access through social engineering and compromised credentials rather than fundamental flaws in its core systems. While critical systems reportedly remain intact and operational, the incident serves as a stark reminder of the sophisticated tactics employed by cybercriminals and the persistent threat of insider compromise within the financial sector. Investigations are ongoing, with authorities focused on recovering the laundered assets and enhancing cybersecurity protocols across the nation’s financial infrastructure.