Fireblocks Enable Institutional Investors to Profit from Staking

[MarkRoberts]

To ensure the security of private keys, Fireblocks collaborates with Coinover, a firm that stores key backups in offline vaults. To make matters worse, Coinover reportedly got the incorrect keys from Fireblocks. According to StakeHound, a confidentiality agreement prohibits Coinover from validating the keys it gets from Fireblocks. As a result, the last opportunity for rehabilitation was lost.

“I can only guess that the MPC creation procedure was not performed properly, therefore generating a defective deposit address,” Lior Yaffe, a blockchain engineer at the Israeli software firm Jelurida who is acquainted with MPC told Mycryptoparadise.

He stated that backing up the seed using Coincover would not have helped in that instance since the MPC process itself was flawed or incomplete. “What is more difficult to comprehend is why this recovery procedure was not tested on a tiny quantity of ETH first before locking such a large number of ETH, or if it was tested before, what caused it to fail later,” he added.

The allegations against Fireblocks came three months after the firm received a $163 million Series C investment from Coatue, Ribbit, Stripes, SVB Capital, and BNY Mellon.

The complaint was filed today in Tel Aviv District Court. Fireblocks and StakeHound were unable to be contacted for comment as of press time.


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