Crypto exchange Gemini and self-directed platform for retirement and retirement accounts IRA Financial Trust (IRA) has reportedly reached an agreement to settle a lawsuit stemming from a 2022 cyber attack.
IRA sued Gemini after the crypto exchange suffered a security breach in February 2022.
The company claims that $36 million of its customers’ assets were lost in Gemini’s custody as a result of the cybersecurity incident.
In its lawsuit, I.R.A so-called that the theft should not have occurred if Gemini’s claims of robust security capabilities were true.
“Contrary to Gemini’s many views on security, Gemini has designed its API (application programming interface) with a single point of failure. If this single point of bankruptcy was breached, a bad actor could steal all the crypto assets of an institutional client’s clients, such as IRA.”
IRA also claimed that it had to warn Gemini because the exchange failed to immediately protect the affected accounts after the incident.
“And IRA did not have the ability to freeze crypto accounts. So once IRA discovered the hack, it had to frantically email Gemini – over and over again – to get all accounts frozen. Remarkably, it took six emails from IRA and almost two hours for Gemini to freeze all customer accounts. In the meantime, millions of dollars in crypto assets were stolen.”
Two years later, Gemini and IRA reportedly struck a deal to settle the lawsuit. According to legal news service Law360, U.S. District Judge Analisa Torres on Thursday approved a dismissal agreement reached by the two sides to close the case.
The details of the agreement have not yet been announced.
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