EigenLayer Says $5.5 Million Hack From ‘Compromised’ Email Thread Is An ‘Isolated Incident’

Ethereum restaking protocol EigenLayer claims that unauthorized selling activity associated with an investor wallet was the result of an isolated hacking event.

On Friday, the EigenLayer team notified the community it was investigating the “unapproved selling activity” associated with one particular wallet address that sold 1,673,645 EIGEN tokens.

“In an isolated incident this morning, an email thread involving one investor’s transfer of tokens into custody was compromised by a malicious attacker,” said the EigenLayer team in an update to the community a few hours later.

The EigenLayer team transferred these tokens into the attacker’s wallet address after sending a test transaction of 1 EIGEN a day prior. 

“The attacker sold these stolen EIGEN tokens via a decentralized swap platform and transferred stablecoins to centralized exchanges,” said the team.

Lookonchain flagged the transaction in question, with the wallet addressing executing the sale via MetaMask’s ‘Swap’ feature. Based on the timing of those token sales, the attacker would have netted around $5.5 million. 

The EigenLayer team said it is in contact with law enforcement, and a portion of the stolen funds has already been frozen. 

EigenLayer also assured the community that its broader ecosystem would not be impacted by the incident, and that it was not related to a vulnerability in the protocol or token contracts. 

Some members of the crypto community remained skeptical of the team’s explanation, questioning why these tokens were sent directly to investors without a vesting contract, especially considering they were supposed to be under a lockup period.

“We trust Web3 to eliminate human error with smart contracts, but many projects still rely on manual handling of token vesting. We need to stop this ASAP,” said Pindora CEO Andreas Pensold. 

The price of EIGEN fell to a low of $3.08 over the weekend but rebounded by 11.2% in the last 24 hours, trading at $3.50 at the time of writing. The token debuted with a fully diluted value (FDV) of $7.2 billion that has since fallen to $5.8 billion.