IRA Financial Trust Hack Reportedly Sees USD 36M in Crypto Stolen From Users

Source: AdobeStock / Zhanna

 

US-based IRA Financial Trust, a regulated financial institution that offers self-directed retirement accounts, has been hit with a hack that resulted in the loss of USD 36m in crypto, Bloomberg reported, citing a person familiar with the investigation.

IRA Financial's official Twitter account previously confirmed that they discovered "suspicious activity" related to consumer funds on February 8, adding that it "has affected a limited subset of our customers with accounts on the Gemini cryptocurrency exchange." 

They further added that they notified all affected customers individually, and that "non-impacted customers" were notified "separately." The company said that they are unable to provide comments due to the ongoing investigation. 

While IRA Financial Trust has not officially disclosed details of the hack, the source told Bloomberg that USD 21m worth of bitcoin (BTC) and USD 15m worth of ethereum (ETH) has been drained from the accounts of IRA Financial Trust customers.

IRA, or individual retirement account, is a form of an individual retirement plan that offers tax-advantaged savings instruments for US workers. IRAs allow users to invest in stocks, bonds, and mutual funds, but not cryptoassets.

However, unlike its peers, IRA Financial Trust allows its customers to purchase crypto through a partnership with major crypto platform Gemini Trust Co.

In a statement published five days ago, Gemini acknowledged the incident but noted that it offers a number of security controls, adding that it "has not been hacked and remains secure."

"While IRA Financial’s accounts are serviced on the Gemini platform, Gemini does not manage the security of IRA Financial’s systems," the company's fraud and security team said. "The security of Gemini’s platform has not been impacted and we have offered assistance to IRA Financial in their investigation. For more information, please reach out to IRA Financial."

Meanwhile, impacted users are taking it to Reddit to complain about the situation. "I’ve followed up with both Gemini and IRA Financial and they said they are working on it. I haven’t heard of anyone else being affected by this hack," one user said.

In a reply, some apparent users have claimed that thieves have directed stolen funds to a Roth IRA account with the name “Benjamin Choe.” They speculated that the hacker might have managed to compromise an employee account with admin privileges, perhaps by taking over the domain, and then used that account to move funds to the 'Choe' account.

"And from that account they did have a whitelist address setup that allowed them to move funds out of Gemini to their address," one user said, stressing that this is just speculation.

“I only had cash in my Gemini account, no coin, and it was all taken in multiple transfers to Choe at [USD] 10k per transfer,” another Reddit user wrote in the thread. “So in only 15 seconds they moved all my cash.”

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