Hackers Steal Bitcoin, Crypto Worth $36 Million from Retirement Accounts

Hackers have reportedly stolen roughly $36 million in cryptocurrency from IRA Financial Trust.

The hackers drained $21 million in bitcoin and collected $15 million in ethereum from IRA Financial Trust customers according to Bloomberg.

The incident took place on Feb. 8 when IRA Financial discovered "suspicious" activity that affected some customers relying on the Gemini Trust Co. crypto exchange.

Chainalysis, a blockchain data platform, found out that the funds were linked to money laundering activity. The firm reportedly determined that the operation was conducted through the Tornado "mixer" service.

IRA Financial, which offers self-directed retirement accounts, did not immediately respond to a request for comment. A spokesperson told Bloomberg that the company was focusing on investigating the security controls regarding the claims.

IRA Financial Trust Founder Adam Bergman posted a letter on Saturday on Twitter said the company "had detected suspicious activity specifically involving a very limited number of customers in the Gemini cryptocurrency exchange."

All other IRA Financial customer accounts and funds are safe and secure, he said.

"I am very upset by what occurred, and I want to assure you that we are taking all appropriate steps to address this situation--including the involvement of third-party forensic experts and state and federal law enforcement," Bergman said.

Gemini said on Reddit that while IRA Financial's accounts are serviced on the Gemini platform, it does not manage the security of IRA Financial's systems.

People who said they were victims of the hacking took to social media to described what had happened to them.

"I was notified IRA Financial had been hacked on February 8th. My account is linked to Gemini and had also been hacked," one person wrote on Reddit. "Money was transferred from my Gemini account to someone random. 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."

"I was also affected by the hack," another person wrote. "Like others, I only had BTC and ETH removed (not USD) and it was transferred to an account with the last name Choe...I did chat with Gemini support and they confirmed for me that their system was not hacked and the issue was with an IRA Financial account."

"We are all in this together," the person added. "Wishing all that were affected the best and that we are remediated for lost funds."

"Hopefully this is a lesson to all of us with money on the exchanges," one person said on Twitter. The IRS does not seem to look kindly on self-custodied IRA assets and this was a small portion of my retirement funds so I never looked in to moving these coins to cold storage. I now deeply regret that."

Cold storage is a way of holding cryptocurrency tokens offline. By using cold storage, cryptocurrency investors aim to prevent hackers from being able to access their holdings via traditional means.

And one person on Twitter complained that Gemini accounts were frozen.

"It’s way past time to unlock Gemini accounts, at LEAST for those not impacted by the breach," the person said. "Don’t screw all your other crypto clients by locking them out of their positions."

News of the hacking follows last week's arrest of a New York couple for allegedly conspiring to launder about $4.5 billion in cryptocurrency stolen during the 2016 hack of the virtual currency exchange Bitfinex.

Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, were arrested in Manhattan, the U.S. Justice Department said.

The hack of Hong Kong-based cryptocurrency exchange is considered one of the biggest crypto heists in history. Law enforcement has seized over $3.6 billion in cryptocurrency linked to that hack, officials said.

Last weeek, Chainalysis said money laundering involving non-fungible tokens, or NFTs, "jumped significantly" in the last half of 2021.

In addition, the company said crypto scammers ripped off over $7.7 billion worth of cryptocurrency in 021, up 81% from the previous year.