IRA Financial (IRA), a platform for self-directed pension management, has filed a lawsuit against cryptocurrency exchange Gemini over the $36 million hack that affected custodian services, resulting in a loss of customers' retirement funds.
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The company said in a press release that the New York-based cryptocurrency exchange did not have "proper safeguards in place to protect customer crypto assets." IRA also claims that Gemini failed to freeze accounts within a sufficient timeframe immediately following the incident.
"Contrary to Gemini's many representations about security, Gemini designed its API 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's representative Eric Ostroff notes that Gemini's platform "inexplicably had a single point of failure that allowed criminals to steal tens of millions of dollars of crypto assets from customer retirement accounts."
The move comes shortly after the Commodity Futures Trading Commission (CFTC) also filed a lawsuit against Gemini, saying the exchange misled it in answers to questions about a futures contract pegged to the price of bitcoin back in 2017.
The CFTC alleges that Gemini "made false and misleading statements" during several meetings from July to December 2017 about its operations.
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