Retirement trust sues Gemini over $36m hack

Retirement investment trust IRA Financial has announced a lawsuit against popular New York-based cryptocurrency exchange Gemini.

The trust manages individual retirement accounts in Bitcoin (BTC) and Ethereum (ETH) and was hacked in February for $36m worth of crypto, losing $21m in BTC and $15m in ETH from its customers’ accounts.

Gemini, which is run by billionaire brothers Cameron and Tyler Winklevoss, has been blamed for an alleged lack of diligence during the attack. IRA alleges that the platform’s exchange systems failed to “freeze accounts within a sufficient time frame immediately following the incident”.

The announcement stated: “As stated in the complaint, the lawsuit, IRA Financial Trust v Gemini Trust Company, LLC, alleges that the Gemini cryptocurrency exchange platform did not have proper safeguards in place to protect customer crypto assets.

“IRA Financial Trust has been working to find a resolution for its impacted customers since this incident occurred and is pledging to use the proceeds from the lawsuit to reimburse IRA Financial customers impacted by the February 8, 2022, incident”, it added.

Responding to the allegations in the statement, Gemini told crypto publication Decrypt: “We reject the allegations in the lawsuit. Our security standards are among the highest in the industry and we are constantly updating them to ensure our customers are always protected.

“In this matter, as soon as IRA Financial notified us of their security incident, we acted quickly to mitigate the loss of funds from their accounts.”

This isn’t the first bout of bad luck for Gemini, last week the independent agency Commodity Futures Trading Commission (CFTC) filed a complaint against the exchange claiming it was deceptive to regulators making “false or misleading comments” to gain approval for future BTC products and development.

Alongside this, Gemini said last month it plans to scale down its workforce by 10% as it prepares to brave the storm during “crypto winter”.

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Updated: 06/07/2022 — 17:00