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Jun 06, 2022, 11:22 ET
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Complaint details Gemini’s flawed cybersecurity practices and faulty API – which included a single point of failure— that ultimately led to customer cryptocurrencies being accessed and stolen off the Gemini exchange
NEW YORK, June 6, 2022 /PRNewswire/ — IRA Financial Trust (IRA), a leading platform for self-directed retirement and pension accounts, has filed a lawsuit against Gemini Trust Company (Gemini), a cryptocurrency exchange and custodian, following a February 2022 theft of $36 million of crypto assets in Gemini’s custody belonging to customers’ retirement accounts.
Gemini Trust Company was founded and is owned by Cameron and Tyler Winklevoss.
IRA Financial Trust has been working to find 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.
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. The lawsuit also claims that Gemini failed to freeze accounts within a sufficient timeframe immediately following the incident, allowing the criminals to continue moving funds out of customers’ accounts on the Gemini exchange after IRA notified Gemini.
The lawsuit further outlines Gemini’s alleged lack of transparency with its cybersecurity protocols—noting the Gemini Cryptocurrency Exchange platform’s API was designed with only a single point of failure, as stated in the complaint.
The lawsuit alleges the following:
IRA is represented in the lawsuit by Eric Ostroff and Barry Kamar of Meland Budwick, P.A.
“IRA Financial filed this lawsuit because, contrary to Gemini’s many public statements about how it prioritizes security, Gemini’s platform inexplicably had a single point of failure that allowed criminals to steal tens of millions of dollars of crypto assets from customer retirement accounts,” said Ostroff. “This lawsuit seeks to remedy the massive damage that IRA suffered. IRA looks forward to proving its claims in court.”
IRA Financial Trust Company is a regulated South Dakota Trust Company of self-directed retirement accounts.
SOURCE IRA Financial Trust
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