Crypto Custody Company Fireblocks Faces Lawsuit Over ETH Loss Worth $71 million 

Sahaj  |  Jun 23, 2021

Fireblocks, the crypto custody firm has been recently exposed to a lawsuit that claims that the carelessness of the company led to a permanent loss of 38,178 ETH. As recently revealed, StakeHound has brought a lawsuit against Fireblocks in Israeli courts.

Fireblocks Faces Lawsuit Over ETH Loss

The company was founded back in the year 2018 and is a crypto custody company that allows institutional customers to shift money around crypto exchanges smoothly without compromising their security.

Well, it was the prime function of the company, however, now it has been sued in a Tel Aviv District Court for supposedly failing to keep up with their promise.

The allegation by StakeHound, the staking platform based in Switzerland said:

“Fireblocks didn’t back up the [StakeHound’s customer’s] private keys needed to open the relevant digital wallet, and for no apparent reason, the keys were deleted, preventing the plaintiff’s digital assets from being accessed.”

In accordance with the allegations by StakeHound, the crypto custody firm acted carelessly by losing the private keys that the company acquired from StakeHound.

This cuts off the access of StakeHound customers to their respective wallets.

Moreover, the staking company claimed that Fireblocks should have arranged a secure backup of private keys too.

Michael Shaulov in Response to the Latest Allegations

The CEO of Fireblocks, Michael Shaulov said that the allegations of failing to back up the keys are groundless because the company was not contractually compelled to back up them. He said:

“There was no contractual obligation for us to provide [StakeHound] any service with regard to that, and in our understanding, the only reason why we provided this service is that there was some pressure from some of [its] customers not to hold 100% of the key themselves.”

Founded back in the year 2020, StakeHound allows the users to stake crypto assets to the network and get rewarded.

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