Following a breach where an investor was robbed of nearly $6 million in tokens, Ethereum restaking protocol, EigenLayer, has asserted that its system does not contain any vulnerabilities. The stolen funds are part of an ongoing recovery effort, some of which have already been frozen.
The incident came to light on 4th October when EigenLayer noticed unauthorized trading activity on a wallet ending with “f10D”. This wallet sold off approximately 1.6 million of EigenLayer’s EIGEN tokens equating to about $5.7 million. In response, the wallet was promptly marked as under investigation by Etherscan upon EigenLayer’s disclosure.
The EigenLayer team disclosed on 5th October that the unauthorized selling of tokens was a result of a hack. According to them, the breach occurred when a malicious actor infiltrated an email thread regarding an investor’s token transfer into custody. Consequently, the investor’s 1.6 million tokens fell into the hacker’s possession.
The stolen EIGEN tokens were subsequently traded through a decentralized platform, and the hacker then moved the stablecoins into centralized exchanges. The protocol stated that it’s already communicating with these platforms and law enforcement agencies, adding that a portion of the funds has already been frozen.
Despite the hack, EigenLayer assured the community that the breach is isolated, with no direct impact on the wider ecosystem. They clarified that the intrusion did not involve any onchain functionalities and reiterated that there are no known vulnerabilities within the protocol or token contracts. EigenLayer is continuing its investigation and promises to provide updates as they gain more information.
The EIGEN token entered the top 100 market rankings. As of October 1st, the token was unlocked and traded at $3.85 on Binance, putting its Fully Diluted Valuation (FDV) at roughly $6.5 billion. This placed the token at the 94th position by market capitalization on CoinMarketCap, but by October 5th, EIGEN was trading at around $3.38 resulting in an FDV of $5.6 billion, moving it down to the 99th position.