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Dear users,

Thank you for waiting. It has been a difficult time for everyone and we truly appreciate your patience. This is the follow-up announcement from our first statement regarding the failure of Fireblocks to secure the cryptographic keys of 38,178 of our Ethereum tokens.

The StakeHound team started with a clear vision of what the future between DeFi and Staking is going to be. We worked hard towards this vision and managed to grow quickly in the short span of a year. Regrettably, because of the severity of the recent events, we have decided to discontinue our liquid staking activities, i.e. the purchase of native tokens in exchange for staked tokens, with immediate effect. This will allow us to devote our full attention to the recovery of the loss.

We will also discontinue the distribution of staking rewards, except for stETH, starting on the 2nd of August 2021. You might want to approach us to sell your stTokens in exchange for native tokens, to which we might agree subject to availability and in accordance with our terms and conditions. You can do so on the StakeHound Onboarding platform. 

Please, note that all staked ETH are locked in the ETH2.0 staking contract for the time being and the possibility to sell stTokens does not apply to stETH. An upcoming update to the protocol by the Ethereum development team will allow the unstaking of the ETH, at which point you may approach us to sell your stETH in exchange for ETH to which we might agree subject to availability at our sole and full discretion. The possibility to exchange stETH for ETH will be reviewed upon the outcome of the unlock process as well as the legal proceedings.

We are humbled by the support that we have received from the community throughout these difficult times and would like to thank you all for this. We will continue to share updates via our official channels and don’t hesitate to email us at [email protected] if you have any questions or concerns.

Thank you for being a part of this journey with us.

Yours faithfully,

The StakeHound Team

June 22 2021 — On the 2nd of May 2021, we were informed by one of our custody providers, Fireblocks, that 38,178 of our staked Ethereum may have been rendered inaccessible because of a failure by Fireblocks to secure the cryptographic keys as they were required to do.

Attempts to resolve this issue with Fireblocks have unfortunately not been successful, and accordingly, proceedings were issued out of the Israeli High Court today.

In short, a series of errors by Fireblocks caused the loss of 2 keys that are part of the 3-of-4 threshold signature for the shards that form the withdrawal key. Fireblocks (1) did not generate their private keys in a production environment, (2) did not include the private keys required to decrypt their 2 key shares in the backup, and (3) lost both keys.

In the coming weeks, there will be a public statement that will describe the next steps for StakeHound. In the meantime, we will perform a smart contract upgrade with immediate effect that will allow for the removal of stETH from the liquidity pools, while preventing it from being sent to the pools. As set out in our Terms and Conditions, we will continue to purchase stTokens and distribute staking rewards subject to availability and at our sole discretion.

We have been deeply touched by the support of our community and partners during what have been difficult and unprecedented events.

Thank you.