Fireblocks faces test for $ 70 million worth of ETH loss: report

Fireblocks is on trial over $ 70 million worth of ETH as crypto-staking platform Stakehound files a lawsuit in Tel Aviv District Court as we read more ETH breaking news today.

Institutional liquidity stake provider Stakehound claims that Fireblocks did not secure its wallet and allegedly more than $ 77 million was lost in ether. Israeli publication Calcalist reported that Stakehound filed a lawsuit against Fireblocks for the loss of $ 75 million worth of ETH, and prosecutors said the security firm was negligent and resulted in a loss of funds that cannot be recovered .

Fireblocks faced a challenge as Stakehould pointed out that the main cause was human error. The allegation is that a Fireblocks employee did not back up the defendant’s private keys but later deleted them for no apparent reason. StakeHound claims negligence resulted in damage and loss of 38,178 ETH, or $ 70 million:

“This is not an easy situation where private keys are simply lost. This led to a catastrophe and damage: the defendant irrevocably lost access to the digital assets of the plaintiff, which were deposited in the electronic wallet provided by the defendant, which caused the loss of 38,178 ETH single of the plaintiff.

In return, Fireblocks confirmed that they will be investigating the situation and assisting everyone involved in solving the problem. The security company refuses to accept responsibility for the loss of funds because the customer fails to adhere to the protection guidelines:

“Keys are generated by the customer and stored outside the Fireblocks platform. The customer did not save the backup with a third party in accordance with our guidelines. “

The founder of Ethereum, Vitalik Buterin, spoke about the importance of developing methods that allow users to restore the private keys in their wallets in an emergency. This is currently not possible without the help of trusted third parties, but the founder indicated that a social security wallet could be a good solution to this problem. They work like any wallet except they add a guardian to the equation that makes it easy to access if the owner loses the key for no reason. If the user loses the key, the social recovery function becomes active and the user can then contact the legal guardian and ask them to sign a special transaction and change the pub code stored in the contract to a new transaction.

.