IRA Sues Gemini Crypto Exchange for Late Action in $36 Million Hack Attack

IRA Financial Trust has filed a lawsuit against Gemini crypto exchange for not taking a timely action in curbing financial losses following a hack attack. Back in February, IRA Financial lost $36 million (roughly Rs. 280 crore) worth of Bitcoin and Ethereum in a hack attack. IRA had teamed up with Gemini to hold cryptocurrencies and now, in its lawsuit, IRA alleges that the crypto exchange did not take quick action to prevent the loss of such a hefty amount.

In its lawsuit, IRA Financial — the manager of non-traditional retirement accounts, has alleged that Gemini failed to freeze accounts within soon enough, that could have saved the outflow of the assets to the hacker(s).

“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,” an official announcement from IRA said in a blog-post.

Gemini was launched in 2014 and its crypto exchange service went live in 2015.

The company, based in New York City in the US, has rejected all allegations levied against it by IRA Financial, claiming that it maintains world-class level of security for the protection of its users and clients.

"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,” a story by Decrypt quoted a Gemini spokesperson as saying.

IRA Financial aims to use the proceeds from this lawsuit for compensating customers who lost the crypto holdings they purchased using their savings.

More details on this case remain awaited for now.

Meanwhile, the crypto sector and the overall digital assets industry has become a hotspot for unlawful cyber activities.

In March, Axie Infinity's Ronin blockchain developed by Sky Mavis was exploited for $625 million (roughly Rs. 4,729 crore).

Crypto hackers, in April, stole $182 million (roughly Rs. 1,389 crore) from Beanstalk Farms, an Ethereum-based stablecoin protocol.

OpenSea, the world's biggest marketplace for non-fungible tokens (NFTs), lost hundreds of digital collectibles in a phishing attack over the weekend. The incident has reportedly caused OpenSea losses worth $1.7 million (roughly Rs. 12.5 crore).