scorecardCrypto-custody firm Fireblocks is being sued by a company that says it was locked out of a wallet containing more than $70 million of ether
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Crypto-custody firm Fireblocks is being sued by a company that says it was locked out of a wallet containing more than $70 million of ether

Emily Graffeo   

Crypto-custody firm Fireblocks is being sued by a company that says it was locked out of a wallet containing more than $70 million of ether
CryptocurrencyCryptocurrency2 min read
  • Fireblocks is being sued by a company that claims it was locked out of a wallet containing more than $70 million of ether.
  • StakeHound says Fireblocks did not back up the private keys to its digital wallet and funds were lost.
  • Fireblocks has denied wrongdoing, claiming StakeHound didn't store the backup per Fireblock's guidelines.
Israeli crypto-custody firm Fireblocks is facing a lawsuit from a company that claims it was locked out of a wallet containing more than $70 million of ether, a report from Calcalist says.

The company, StakeHound, claims that negligence by a Fireblocks employee led to the crypto assets being lost without any backup available. The Fireblocks employee allegedly did not protect or back up the private keys to a digital wallet. Then, the keys were deleted, preventing StakeHound from accessing its assets.

The wallet in question had 38,178 ether coins, equal to over $72 million at the time of writing.

"This is a human error committed by an employee of the defendants, who worked in an unsuitable work environment, did not protect or back up the defendant'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," StakeHound said.

Fireblocks has denied any wrongdoing, claiming: "The keys were generated by the client and stored outside the Fireblocks platform," and "the customer did not store the backup with a third-party service provider per our guidelines."

Fireblocks also said it is "actively investigating the situation," and all Fireblocks' customers' funds are safe.

For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.

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