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Gemini Settlement With IRA Completed to End Lawsuit Over 2022 Security Breach

Key Points:

Gemini settlement with IRA has been completed with Judge Analisa Torres dismissing the case.
The Gemini breach led to the theft of $36 million in cryptocurrency from IRA Financial Trust accounts linked to the exchange.
Gemini also recently settled with New York regulators over its Gemini Earn program.

According to Cointelegraph, cryptocurrency exchange Gemini has settled a lawsuit with retirement platform IRA Financial Trust, resolving a legal dispute that began in June 2022.

Gemini Settlement With IRA Approved By Judge

The Gemini settlement with IRA, dismissed on July 18 by Judge Analisa Torres of the U.S. District Court for the Southern District of New York, was centered around allegations of inadequate security measures by the exchange.

IRA Financial Trust accused Gemini of failing to protect its security protocols, which allegedly led to a significant breach in February 2022. Hackers exploited the IRA master key, leading to the theft of $21 million in Bitcoin and $15 million in Ethereum. The funds were taken from accounts linked to the Gemini exchange. IRA Financial Trust claimed that Gemini’s failure to act promptly by freezing accounts exacerbated the losses.

Following the breach, IRA Financial Trust has been working to reimburse affected customers, using proceeds from the lawsuit to aid in this effort. The Gemini settlement with IRA marks the end of legal action stemming from the incident.

Gemini Faces $37 Million Fine and $1.1 Billion Repayment

In related developments, Gemini, run by the Winklevoss twins, has recently settled other regulatory issues. The exchange reached agreements with the New York Department of Financial Services (NYDFS) and the New York Attorney General’s office over its Gemini Earn program.

These agreements included paying $37 million in fines and agreeing to return $1.1 billion to affected users. The Gemini Earn program, marketed as a low-risk investment, involved lending crypto assets to Genesis Global Capital (GGC) with promises of high-interest returns.

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Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.