Kathmandu, September 21
Nepal’s stock market was abruptly shut down on Monday after a ransomware attack targeted the infrastructure of Data Hub Pvt. Ltd., which hosts the Trading Management System (TMS) servers of 72 brokerage companies.
According to Data Hub, the attack on its TMS hosting infrastructure was detected at around 5:30 am on Bhadra 4. Data Hub hosts the servers used by 72 trading member, or brokerage, companies.
The company has explicitly described the incident as a ransomware attack in a letter sent to YCO Pvt. Ltd.
A ransomware attack can restrict access to data and systems, potentially leaving them unusable. Data Hub said the attack may have spread to other connected networks and systems, prompting it not to bring the affected systems back online immediately.
The company said it was conducting an investigation and forensic analysis to assess the full impact of the incident while taking necessary security and recovery measures.
“We isolated the affected infrastructure to prevent the ransomware attack from reaching NEPSE’s system after the problem occurred within Data Hub’s infrastructure,” NEPSE spokesperson Murahari Parajuli said.
NEPSE said trading would resume only after Data Hub fully resolves the problem.
Data Hub said the latest backup of its entire infrastructure before the incident had been taken at around 4 am on Bhadra 4 and was stored securely in an isolated location.
The company said the affected systems had not yet been brought back online because of the possibility that the ransomware could have affected or spread to other connected networks and systems.
Since the TMS is connected to other related systems, Data Hub had requested additional time to conduct forensic analysis and implement necessary corrective measures before restoring the system, leading NEPSE to suspend all trading on Monday.
Data Hub said it was working to restore the system as quickly as possible.
NEPSE said it suspended trading because operating under the circumstances could potentially expose its own trading system to damage.
In a notice, NEPSE said the decision was taken under Rule 21(1) of the Securities Listing and Trading Regulations, 2018. The rule allows NEPSE to suspend or close regular share trading in the event of special circumstances, technical problems or systemic risks.
NEPSE spokesperson Parajuli said measures had been put in place to protect the NEPSE Online Trading System (NOTS), which is under NEPSE’s control.
“Cyberattacks cannot be reduced to zero anywhere in the world. However, adequate arrangements have been made to minimise the potential damage from such risks,” Parajuli said.
Investors raise concerns
Investors, meanwhile, have expressed concern over repeated disruptions to share trading and accused the regulatory authorities and government of failing to take the issue seriously.
“Sometimes it is a server outage, sometimes an attack on the server. When such problems shut down trading, our assets effectively remain locked,” said Tulsiram Dhakal, president of the Nepal Investors’ Forum.
He said it was unfortunate that NEPSE, the Securities Board of Nepal and the Ministry of Finance had not taken the recurring problems seriously.
“This is also an attack on our assets. Some investors may have to sell shares and arrange money on the same day, but when trading is halted, we are the ones who suffer,” Dhakal said.
He said around eight million investors are involved in Nepal’s capital market and argued that the Ministry of Finance should take the lead in adopting secure technologies used by major stock markets around the world.
“One of the reasons we have repeatedly called for a new stock exchange is the expectation that new technology would be introduced and problems like these could be avoided,” he said.
Nepal’s capital market is currently worth around Rs 4.553 trillion. Dhakal said investors are repeatedly worried that an incident involving the market’s infrastructure could put such a large pool of assets at risk.
“We investors have put our entire earnings into the capital market. Incidents like these keep frightening us from time to time,” he said.
Securities Board of Nepal spokesperson Niranjay Ghimire said the board was currently seeking information from the concerned parties about the incident.
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