A United States federal judge has ordered asset custodian Kingdom Trust to fully restore data access to all affected clients following the unilateral termination of customers' access to their own account information on Bitcoin IRA's website.
Filed on Nov. 12, a court document reveals that South Dakota District Court Federal Judge Karen E. Schreier ruled in favor of Bitcoin IRA in the case against Kingdom Trust, where the latter allegedly breached a referral agreement by terminating customers’ access to their account data on Bitcoin IRA’s platform without providing prior notice.
The breach of the referral agreement
As described in the document, in September 2018, Bitcoin IRA and Kingdom Trust entered into a referral agreement, which indicated that Bitcoin IRA would refer its customers to use Kingdom Trust as a trust custodian. In return, Kingdom Trust agreed to pay Bitcoin IRA a referral fee for account owners who became Kingdom Trust customers.
However, in August of 2019, Kingdom Trust unilaterally removed Bitcoin IRA’s application programming interface (API) access and stopped providing daily updated account information. This eventually led to inaccurate reflections of information about assets held in clients’ accounts.
Schreier said in the ruling that “Kingdom Trust unilaterally terminated customers’ access to their own account data on Bitcoin IRA’s website, and it has not shown that the interference is justified.” Following the order release, Kingdom Trust must:“Fully restore to the condition and functionality existing prior to August 21, 2019, Alternative IRA Services LLC’s (Bitcoin IRA) access to account holder data of the accounts to which Bitcoin IRA is the account designated representative by the account holder, and account holder access to Bitcoin IRA’s online platform, thereby allowing the account holders to once again self-direct their retirement accounts online 24 hours a day, 7 days a week.”
Expansion of crypto retirement savings offerings
As cryptocurrencies become more widely adopted, holders are increasingly including digital assets in their retirement plans and savings accounts.
On Nov. 13, Kingdom Trust along with major American crypto exchange Coinbase and alternative assets investment firm Regal Assets began offering cryptocurrency-based individual retirement and 401(K) accounts in the United States.
The new offering will purportedly give investors access to over 30 assets directly through Coinbase, with insurance protection provided by Lloyd’s of London.
As reported last month, Bitcoin IRA partnered with digital asset lending firm Genesis Capital to offer investors the opportunity to earn interest on crypto and cash holdings. Bitcoin IRA has reportedly provided digital asset IRAs since 2016 and processed over $350 million in investments, onboarding 4,000 clients.