The loss had been originally discovered on May 2nd, but kept quiet as the company attempted to reclaim the key. Stakehound blamed their custody provider, Fireblocks, for the loss and sued the firm in Isreali court. To date, the issue has not been resolved. Customers have been left holding the Stakehound stETH token, which is now practically worthless:
We have discovered that Celsius Network had sent 35,000 Ether to Stakehound in a single transaction on February 2nd, 2021:
We believe Celsius sent additional Ether through Stakehound, as known Celsius wallets currently hold a total of at least 42,306 Stakehound stETH, making them the largest owner of the nearly worthless token:
At today’s ether price, this is a loss of approximately $71 million. This, to our knowledge, is the first time that Celsius’ exposure to the Stakehound debacle has been reported. The company chose to hold this information back from its customers for over a year to date. So much for transparency…
