On October 4, 2024, EigenLayer revealed an incident involving the unauthorized sale of 1.67 million EIGEN tokens, equivalent to $5.7 million.
Attacker Compromises Token Transfer in Email Exchange
An attacker compromised a token transfer transaction via an insecure email exchange, resulting in the loss of these funds.
Part of the stolen funds was immediately exchanged for stablecoins through a decentralized exchange before being transferred to centralized platforms. EigenLayer’s team acted swiftly, collaborating with authorities to freeze a portion of the affected funds.
An Isolated Incident without Protocol Vulnerability
EigenLayer reassured its community that this incident was an isolated case and did not involve a vulnerability related to the Eigen Layer protocol. There were no identified flaws in the token smart contracts or on-chain functionalities, ensuring the overall security of their system.
The EigenLayer team stated that a thorough investigation is underway and updates will be provided as new information becomes available.
The attack was due to an infiltration of an email conversation between an investor and the custody service responsible for token transfer. The hacker managed to deceive the investor into sending the tokens to an address under their control. Once the tokens were obtained, the attacker quickly exchanged them for stablecoins like USDC and transferred them to centralized exchanges.
Market Reaction to EIGEN’s Price
The price of EIGEN token has recently experienced a significant decline, dropping from over $4 at the time of its listing to the current value of $3.1.
This fluctuation has elicited various reactions among investors and market observers. On platforms like X, users express a mix of surprise and strategic anticipation, with some seeing it as a buying opportunity in anticipation of a future rise, while others are concerned about the volatility and its long-term implications on the valuation of EIGEN.
