EigenLayer hit with $5.7M “hack” via isolated incident with no vulnerability

THE October 4, 2024, EigenLayer revealed an incident involving an unauthorized sale of 1.67 million tokens EIGENequivalent to $5.7 million.

An attacker compromised a token transfer transaction via an insecure email exchange, resulting in the loss of these funds.

A portion of these stolen funds was immediately exchanged for stablecoins via a decentralized exchange before being transferred to centralized platforms. EigenLayer teams acted quickly, working with authorities to freeze a portion of the affected funds.

Community Update:
In an isolated incident this morning, an email thread involving one investor's transfer of tokens into custody was compromised by a malicious attacker.
As a result, 1,673,645 EIGEN tokens were erroneously transferred to the attacker's address. The attacker…
— EigenLayer (@eigenlayer) October 4, 2024

An isolated incident with no protocol vulnerability

EigenLayer reassured its community that this incident was a isolated case and did not concern not a vulnerability linked to the Eigen Layer protocol. No flaws has not been identified at the level of smart token contracts or on-chain functionalities, thus ensuring the overall security of their system.

The EigenLayer team said a thorough investigation is underway and updates will be provided as new information becomes available.

The attack is due to infiltration into an email conversation between an investor and the custody service responsible for transferring the tokens. The hacker managed to trick the investor into sending the tokens to an address under his 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 price

The price of the token EIGEN recently experienced a drop not negligible, going from more than $4 at the time of his listing at a current value of $3.1.

This fluctuation has sparked various reactions among investors and market observers. On platforms like Xusers express a surprise mixed with a strategic expectation, some seeing it as a buying opportunity in anticipation of a future increase, while others are worried about the volatility and implications for the evaluation long term of EIGEN.

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