Another lawsuit filed against Gemini cryptocurrency exchange

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Three days after filing the lawsuitlawsuit by the Commodity Futures Trading Commission (CFTC), another lawsuit was filed against the Gemini cryptocurrency exchange, this time from IRA Financial Trust.

Pension account management company indigital assets IRA Financial Trust filed a lawsuit against the Gemini exchange in connection with the theft of crypto assets worth $36 million. Let us recall that in February, IRA Financial Trust founder Adam Bergman reported suspicious activity indicating attempts to steal funds that affected clients with accounts on the Gemini exchange.

The IRA claims Gemini failed to complykey obligations to ensure proper security of cryptoassets transferred to it for storage. In addition, the exchange failed to block accounts immediately after the incident. This allowed criminals to continue transferring funds from IRA clients' accounts even after the company notified the exchange of the hack. 

The lawsuit notes that Gemini relied on a “faulty” API that “had a single point of failure.”

“The Gemini API system contained not only“a single point of failure, but also a large-scale vulnerability that allowed hacking of just one client account to gain access to all IRA accounts,” IRA Financial said in the lawsuit.

The IRA is demanding that Gemini provide refunds to customers affected by the incident that was not prevented. Let us remind you that in total the hackers stole $21 million worth of BTC and $15 million worth of ETH.