Crypto exchange Gemini sued over $36 million Bitcoin, Ethereum exploit
IRA Financial Trust, a major platform for a self-directed retirement and pension plans, has launched a lawsuit against cryptocurrency exchange Gemini over a $36 million theft that occurred on February 8, 2018. As a result, the claimed hack involved $21 million in Bitcoin and $15 million in Ethereum, with the funds reportedly coming from users' retirement accounts kept in Gemini's safekeeping.
Since the issue became public, both firms have been playing the blame game, pointing fingers at each other as the source of the monies lost. The Trust, on the other hand, has been striving to find a solution for its harmed clients and has now committed to using the litigation funds to repay those who have been affected by the event.
a summary of all the allegations
According to the lawsuit, Gemini did not have enough measures in place to secure consumer cryptocurrency funds. It further says that once IRA alerted Gemini, the exchange failed to block accounts in a timely manner, allowing thieves to continue transferring cash out of consumers' accounts on the exchange.
According to the complaint, the Gemini Crypto Exchange platform's API was constructed with only a single point of failure, indicating Gemini's claimed lack of openness with its cybersecurity procedures.
As a result, Meland Budwick, P.A.'s Eric Ostroff, and Barry Kamar are representing IRA in the complaint. Ostroff explained why the Trust brought the lawsuit in the first place.
"IRA Financial filed this lawsuit because, despite Gemini's many public statements about how security is a top priority, the platform had an inexplicable single point of failure that allowed criminals to steal tens of millions of dollars in crypto assets from customer retirement accounts," according to the lawsuit.
He continued,
"The purpose of this case is to compensate IRA for the significant harm it has incurred." The IRA is eager to present its case in court."
According to reports, Gemini has denied the lawsuit's claims.
Gemini's tribulations
The CFTC is said to have sued Gemini Trust Co. over its Bitcoin Futures offer earlier this week. As previously reported, the regulator accused the exchange of providing false information in its effort to offer the product.
Gemini's proposal for Bitcoin Futures in 2017 sank into legal quagmires.
The exchange was also in the headlines recently for laying off 10% of its workers and seeing a drop in transaction activity.
Dealing with IRA's new lawsuit will be difficult for the exchange in the midst of the already chaotic situation.