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Gemini slammed with lawsuit over platform breach

TL;DR Breakdown
  • Gemini dragged to court over platform breach
  • The exchange lost about $30 million
  • Gemini refutes IRA allegations

Gemini crypto exchange has been slammed with a lawsuit over the recent platform breach some months ago. According to several sources, the platform is being dragged to court by IRA Financial Trust. The plaintiff owns a platform where it manages funds in crypto on behalf of retired workers. According to the lawsuit filed, the asset management platform is suing Gemini in court over its failure to protect customers’ funds while the breach was occurring.

The exchange lost more than $30 million

According to the report, IRA Financial Trust held the majority of funds belonging to its customers in diverse digital assets on the Gemini exchange. The breach saw the crypto exchange suffer a massive loss of around $30 million. As per reports, the hackers were able to breach the platform and conduct a series of unsanctioned withdrawals from various wallets on the platform.

After the breach, there has been a trail of blame between the two firms on who was responsible for the breach in the first place. To make matters worse, there were reports of an emergency call that took the attention of the majority of the staff at the IRA headquarters. Gemini has always mentioned that it tries to combat hackers and scams by putting measures such as 2FA and others in place.

Gemini refutes IRA allegations

In its statement, IRA mentioned an issue with the API on the Gemini exchange. According to the Trust, the crypto exchange has a built-in master key that allows access to all accounts without any hindrance. The statement claimed that the hackers breached the platform and got hold of the Trust’s master key, which was used to drain the funds on the platform. There are claims that some of the few emails without encryption that both parties exchanged were the weak link where the hackers breached the platform. IRA also mentioned that the crypto exchange failed to notify it of the existence of a master key.

This lawsuit is coming off the back of a protracted settlement out of court that both parties agreed to some months ago. The Trust has plans to pay back its investors with the proceeds if it eventually wins the case. However, the spokesperson at Gemini has refuted the claims in the lawsuit stating that the platform has one of the most sophisticated securities among exchanges in the world. The representative also mentioned that evaluation and checks are done at intervals to ensure they are up to date. The exchange said that it moved swiftly to curb the degree of damage as soon as it was informed of the breach.

Owotunse Adebayo

Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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