Crypto exchange Gemini and self-directed retirement and pension accounts platform IRA Financial Trust (IRA) have reportedly reached an agreement to settle a lawsuit stemming from a 2022 cyberattack.
IRA sued Gemini after the crypto exchange suffered a security breach in February 2022.
The firm claims that $36 million worth of its customers’ assets in Gemini’s custody were lost due to the cybersecurity incident.
In its lawsuit, IRA alleged that the theft should not have happened if Gemini’s claims of having robust security capabilities were true.
“Contrary to Gemini’s many representations about security, Gemini designed its API (application programming interface) with a single point of failure. If breached, this single point of failure allowed a bad actor to steal all crypto assets held by the customers of an institutional customer, like IRA.”
IRA also claimed that it had to alert Gemini because the exchange failed to immediately protect the accounts involved after the incident.
“And IRA did not have the ability to freeze crypto accounts. Thus, once IRA discovered the hack, it was left to frantically email Gemini – again and again – to get all accounts frozen. Remarkably, it took six emails from IRA and nearly two hours for Gemini to freeze all customer accounts. In the interim, millions of dollars in crypto assets were stolen.”
Two years later, Gemini and IRA reportedly hammered out a deal to settle the suit. According to legal news service Law360, U.S. District Judge Analisa Torres on Thursday approved a stipulation of dismissal that the two parties reached to close the case.
The details of the agreement have not yet been disclosed.
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