{"id":44791,"date":"2021-06-22T18:33:29","date_gmt":"2021-06-22T15:33:29","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=44791"},"modified":"2025-08-31T18:41:40","modified_gmt":"2025-08-31T15:41:40","slug":"lawsuit-filed-against-fireblocks-over-alleged-loss-of-38178-eth","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/lawsuit-filed-against-fireblocks-over-alleged-loss-of-38178-eth\/","title":{"rendered":"Lawsuit filed against Fireblocks over alleged loss of 38,178 ETH"},"content":{"rendered":"

Swiss staking platform StakeHound has accused institutional-focused infrastructure company Fireblocks of asset loss. The lawsuit was filed in Tel Aviv District Court, according to Calcalist<\/a>.<\/p>\n

<\/p>\n

Founded in 2017, Fireblocks used multi-party computation (MPC<\/a>) to store private keys. For security, it forwarded backups to Coincover.<\/p>\n

According to the complaint, as a result of negligence the defendant lost StakeHound’s private keys. Coincover employees allegedly received incorrect data \u2014 they could not verify their correctness at the initial stage due to a confidentiality agreement.<\/p>\n

The plaintiff estimated the damages at around 38,178 ETH (~$68 million at the time of writing).<\/p>\n

Blockchain developer Lior Yaffe, in comments to Decrypt<\/a>, suggested that the cause was errors in the MPC creation process.<\/p>\n

\n

‘As a result, an incorrect deposit address was obtained,’ he explained.<\/em><\/p>\n<\/blockquote>\n

In his view, even a backup via Coincover would not have saved it.<\/p>\n

\n

‘What is harder to understand is why the recovery process was not tested on a small amount before locking such an amount of ETH, or, if it had been tested earlier, what caused the later failure,’ said Yaffe.<\/em><\/p>\n<\/blockquote>\n

As \u0437\u0430\u044f\u0432\u0438\u043b\u0438<\/a> at Fireblocks, the StakeHound project was run off-platform, and the client did not keep a backup with an external provider in accordance with the recommendations.<\/p>\n

\n

‘The Fireblocks team is working hard to help all parties involved in restoring access to ETH,’ the statement said.<\/em><\/p>\n<\/blockquote>\n

In 2019 the company raised $16 million from venture firm Tenaya Capital, Cyberstarts and Fidelity International’s unit.<\/p>\n

Earlier in March 2021, Fireblocks closed a $133 million funding round<\/a>. The project was supported by Ribbit Capital, Galaxy Digital and Paradigm.<\/p>\n

Subscribe to ForkLog news on Telegram: ForkLog Feed<\/a> \u2014 the full news feed, ForkLog<\/a> \u2014 the most important news, infographics and opinions.<\/p>\n","protected":false},"excerpt":{"rendered":"

Swiss staking platform StakeHound has accused institutional-focused infrastructure company Fireblocks of asset loss. The lawsuit was filed in Tel Aviv District Court, according to Calcalist.<\/p>\n","protected":false},"author":1,"featured_media":26216,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1162,1386],"class_list":["post-44791","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-court-cases","tag-fireblocks"],"aioseo_notices":[],"amp_enabled":true,"views":"28","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/44791","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=44791"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/44791\/revisions"}],"predecessor-version":[{"id":44792,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/44791\/revisions\/44792"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/26216"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=44791"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=44791"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=44791"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}