Fireblocks Being Claimed For Losing Assets Worth $72M

Fireblocks Being Claimed For Losing Assets Worth $72M

Fireblocks is facing a legal suit for failing to backup the private keys to the pockets. The lost pocket contained 38,178 ETH, estimated to be greater than $72 million at the time.

Fireblocks Faces a Lawsuit

The Crypto-custody provider, Fireblocks is an all-in-one platform to store, transfer, and issue digital assets across the entire ecosystem. On June 22nd, StakeHound, a crypto staking provider, sued for lost access to more than $72 million worth ETH.

Moreover, StakeHound claims a Fireblocks employee apparently failed to protect the private keys of the wallet. It then deleted and prevented access to its crypto assets. In regards, StakeHound raised a petition in the Tel Aviv District Courtroom on June 22nd for this issue. 

Further, StakeHound boldly claimed stating, 

“The worker didn’t shield or again up the defendant’s non-public keys wanted to open the related digital pockets, and for no obvious motive, the keys have been deleted, stopping the plaintiff’s digital property from being accessed.”

The firm adds, it can be a human error committed by a worker of the defendants, who labored in an unsuitable work atmosphere. The court revealed the judgement as Fireblocks workers failed to guard or backup the private keys to the pockets. Which then deleted and prevented  StakeHound from accessing its property. 

Fireblocks Response

With all the controversies, the Israeli media Fireblocks denied the negligence and reported against the case. As per the rule, the client’s private keys must be stored outside Fireblocks platform. Moreover, the customer did not store the backup with a third-party service provider per our company’s guidelines. 

Besides, Fireblocks is working towards resolving the issue by initiating and involving all parties. To avoid such scenarios, in December 2020, Fireblocks requested StakeHound to create a set of “BLS key shares” associated with an ETH 2.0 staking mission.  

Finally,  Fireblocks clarifies, no production keys ever affected, and all Fireblocks customers funds are safe, and customer keys are backed up and recoverable.

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A Professional HR with a huge interest in blockchain technology and cryptocurrency. Through her content writing skills, she became a passionate contributor to the crypto space. Being an active crypto enthusiast she is investing her time and experience into the digital sphere.