Ethereum restaking protocol EigenLayer claims unauthorized selling activity 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

A hacking event led to the unauthorized selling of 1,673,645 EIGEN tokens from an investor wallet, according to restaking protocol EigenLayer.

The incident was highlighted by blockchain analytics firm Lookonchain on Saturday, with the tokens being sold via a decentralized swap platform and the proceeds — around $5.5 million — being transferred to centralized exchanges.

EigenLayer confirmed the selling activity in an update on Friday, stating that the tokens were sold from a wallet address after a test transaction of 1 EIGEN was sent a day prior.

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

The restaking protocol also highlighted that the incident was not related to any vulnerability in the EigenLayer protocol or token contracts and that the broader EigenLayer ecosystem would be unaffected.

However, some members of the crypto community expressed skepticism over the team's explanation, questioning why these tokens were sent directly to investors' wallets without a vesting contract, given that they were meant to be locked up.

“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,” Pindora CEO Andreas Pensold said in a commentary on the event.

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