Lawsuit Against Fireblocks Over $71 M Worth Ethereum Loss

[MarkRoberts]

Fireblocks, a cryptocurrency custody firm established in 2018, is being sued for allegedly failing to allow institutional investors such as banks to move money quickly between bitcoin exchanges without security breach.

StakeHound, a Swiss-based staking platform, claims Fireblocks failed to back up the StakeHound’s customer’s private keys required to unlock the relevant digital wallet, and for no apparent reason, the keys were destroyed, preventing the plaintiff’s digital assets from being accessed.”

StakeHound, which was founded in 2020, allows users to stake crypto—pledge crypto assets to the network and receive incentives in exchange—by wrapping assets in “staked tokens” that reflect the underlying asset on a 1:1 ratio. According to StakeHound, the promised crypto assets are held by businesses such as Fireblocks.

According to Lior Lamesh, who is carefully following the litigation, the issue concerns a significant mistake in the ETH 2.0 staking service provided by StakeHound, for which Fireblocks serves as the custodian of private keys. Lamesh formerly worked as a cybersecurity specialist in the Israeli prime minister’s office and is currently the CEO of cryptocurrency custody firm GK8.


Source: MyCryptoParadise