EigenLayer Suffers $5.5M Token Heist After Email Breach, Funds Partially Frozen

🚀 Stay Ahead with AltcoinDaily.co! 🌐

Ethereum-based restaking protocol EigenLayer has confirmed that a recent suspicious sale of $5.5 million worth of tokens was the result of a hack, not insider misconduct as initially speculated.

On Friday, traders grew suspicious when 1,673,645 EIGEN tokens were sold shortly after the token became tradable, raising concerns that someone may have violated the token lockup period. EigenLayer quickly announced it would investigate the “unapproved selling activity.”

Following a detailed inquiry, the protocol revealed that an email thread regarding a token transfer had been compromised by a malicious actor. Instead of the intended recipient, the attacker received the tokens and swiftly swapped them for stablecoins, moving the funds to centralized exchanges.

🌟 Unlock Crypto Insights with AltcoinDaily.co! 💰

EigenLayer assured its users that the incident was unrelated to any protocol vulnerabilities and said it is cooperating with law enforcement and affected exchanges to recover the stolen assets.

Hacker Exploits Investor Email

In a statement on X, EigenLayer explained that the hacker accessed the email communication of an investor, allowing them to intercept the token transfer. The attacker wasted no time in swapping the EIGEN tokens for stablecoins and moving the proceeds to several centralized exchanges. Fortunately, EigenLayer confirmed that a portion of the funds has already been frozen, and efforts to reclaim the remaining amount are underway.

“There is no known vulnerability in the protocol or token contracts,” EigenLayer clarified. “This incident was an off-chain compromise and does not reflect any technical issue with our platform.”

🦂 AltcoinDaily.co is your trusted source for the latest in crypto news and insights. 🚀

The protocol has now implemented stricter policies to prevent similar incidents in the future, including prohibiting current and former employees from staking or selling EIGEN tokens until at least September 2025.

EIGEN Token Remains Stable

Despite the breach and subsequent investigation, the price of EIGEN has shown resilience, increasing by 1.32% over the past 24 hours to $3.32. This slight uptick brings the token’s fully diluted market value to an estimated $5.4 billion, indicating that investor confidence has not been severely shaken by the hack.

Notably, just last week, EIGEN started trading on several exchange platforms including Binance after its airdropping event.

As the situation unfolds, EigenLayer’s swift action and cooperation with authorities could prove critical in restoring trust and ensuring the long-term security of the platform.