Judge Dismisses Case Against Gemini in $36 Million Crypto Theft Lawsuit

full version at beincrypto

Gemini cryptocurrency exchange has settled its fraud-related lawsuit with IRA Financial Trust, according to court filings.

This concludes a dispute that began nearly two years ago following the theft of $36 million from IRA’s crypto fund.

Gemini settles with IRA

On July 18, Judge Analisa Torres dismissed the case between IRA Financial Trust and Gemini Trust. According to Court documents seen by BeInCrypto, the judge dismissed the case with prejudice, meaning it cannot be re-litigated.

“It is hereby stipulated and agreed by and between the parties and/or their respective counsel(s) that the above-captioned action is voluntarily dismissed, with prejudice against the defendant(s) Gemini Trust Company, LLC,” the filing stated.

Although specific details of the settlement are undisclosed, this agreement ends the two-year dispute. In June 2022, IRA sued Gemini, alleging misrepresentation of security protections. IRA accused Gemini of lacking transparency regarding its security protocols, which led to the theft of $36 million from its customer funds in February 2022.

At the time, the IRA alleged that Gemini never explained the critical nature of the master key. The South Dakota Trust company claimed the crypto exchange treated it as mundane information, exchanging unsecured, unencrypted emails containing the master key.

According to the firm, this allowed Hackers to gain control of this master key. These malicious players transferred millions in crypto, including Bitcoin and Ethereum, from multiple individual accounts to a single retirement account before making withdrawals.

“IRA Financial filed this lawsuit because, contrary to Gemini’s many public statements about how it prioritizes security, 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,” IRA’s lawyers stated.

On its part, Gemini denied any wrongdoing. The exchange stated it processed legitimate and authorized transactions from the IRA account.

Meanwhile, this settlement marks another step in Gemini’s efforts to resolve its several legal challenges. The exchange recently agreed to pay over $80 million to the New York authorities regarding its defunct Gemini Earn investment program. This includes a $50 million settlement with the Attorney General’s office and a $37 million fine to the New York State Department of Financial Services.