Winkelvoss twin swap to stand trial for stealing $36 million

The Winklevoss twins sued after the theft of their Gemini exchange. The applicant alleges that the protective measures were insufficient.

The Winklevoss twins will soon be brought to justice. The Verge reports that pension savings company IRA Financial Trust is attacking Gemini, the brothers’ cryptocurrency exchange, on the grounds that the company allegedly failed to adequately protect its users from a Feb. 8 attack that allowed attackers to steal the equivalent of $36. million in bitcoin and ethereum. According to the IRA, the company had no “real safeguards”to prevent this theft, and it did not freeze the accounts quickly enough to prevent the thieves from transferring the money.

Winklevoss twins sued for theft of their Gemini exchange

The pension savings company, in particular, refutes the Gemini’s claims that its defense prevented a “critical point.”Gemini has made the IRA the parent account for its customers (who use sub accounts) and provided a “master key”that appears to have been exchanged in a series of insecure emails. Add to this the security flaws in the Gemini system and we have the situation we know: hackers got hold of the IRA key, moved the cryptocurrency to the same user’s retirement account, and withdrew all the money. The perpetrators also hit the Twins during the February incident, making a fake call to the police about the kidnapping.

The applicant submits that the protection measures were insufficient.

According to the IRA, the Twins’ other security measures would have been useless. With them, it would normally be impossible to transfer money between accounts if the exchange had properly implemented two-factor authentication or if it had prevented transfers between accounts. The savings company states that it was unable to block the accounts itself and that it took at least six emails to block the accounts of all affected users.

An extra big problem for the Winkelvoss twins. The two brothers recently had to part with 10% of their wages to deal with a debacle in the cryptocurrency market, and the Commodity Futures Trading Commission (CFTC) recently sued Gemini for allegedly misleading customers about their exchange and futures contracts. While none of these problems can be fatal, the financial consequences can be significant and long-term.