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IRA Financial Trust files charges against Gemini over February hack

IRA Gemini
IRA Gemini

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IRA Financial Trust has launched a lawsuit against the Gemini cryptocurrency exchange. IRA Financial Trust is a company that manages individual retirement accounts dealing in non-traditional financial assets such as Bitcoin.

IRA Financial Trust sues Gemini

In February, IRA Financial Trust was hacked for $36 million worth of cryptocurrencies. The attackers behind the hack managed to walk away with $21 million worth of Bitcoin and $15 million worth of Ether (ETH) stolen from retirement accounts.

IRA is one of the users of the Gemini cryptocurrency exchange. The company uses Gemini to hold cryptocurrencies, and it said that the systems of the New York-based exchange were not quick to halt account operations within an adequate time after the incident.

In the announcement, IRA said, “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.”

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IRA Financial Trust also said that it had been working to integrate a solution for the affected users since the incident happened. The platform is also pledging to use the funds from the lawsuit to reimburse the users of IRA Financial that had been affected by the incident that happened on February 8, 2022.

IRA is one of the institutional investors that have moved into the cryptocurrency space over the past year. The company, based in Miami, is responsible for individual retirement accounts and tax advantage savings instruments for US workers who can deduct contributions from the income.

Gemini responds to accusations

The Gemini exchange responded to the accusations made by IRA, saying, “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 is not the first negative experience suffered by Gemini recently. The exchange was recently accused by the US Commodity Futures Trading Commission (CFTC) of misleading regulators by “making material false or misleading statements.” The move was made in an effort to receive regulatory approval for its Bitcoin futures product.

The exchange further announced that it would lay off 10% of its staff to enable the exchange to withstand the crypto winter that is expected to happen soon.

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