EigenLayer Engages Law Enforcement to Recover Millions in Stolen Tokens

EigenLayer collaborates with centralized exchanges and law enforcement to resolve a multimillion-dollar hack.

Hacker unplugging the code to take advantage of Ethereum.
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  • EigenLayer has confirmed an exploit that targeted an investor on its platform.
  • The incident claimed millions in EIGEN tokens.
  • The protocol has reached out to law enforcement to recover the stolen funds.

Ethereum restaking protocol EigenLayer has doubled down on efforts to recover millions stolen from one of the investors on its platform on October 4.

On Friday, EigenLayer initiated an investigation into an โ€œunapproved selling activityโ€ involving its token EIGEN. The protocol later confirmed that the activity stemmed from a hacking incident that claimed 1,673,645 EIGEN tokens, worth about $5.87 million.

EigenLayerโ€™s Response

In a follow-up community update on October 5, EigenLayer said the tokens were โ€œerroneously transferredโ€ by a malicious attacker who compromised an email thread between the investor and its custody service.

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The attacker quickly sold the stolen tokens via a decentralized swap, in exchange for USDC. From there, they transferred the stablecoins to centralized exchanges HitBTC and Kraken in an attempt to obscure the trail.

Noting that a portion of the USDC had already been frozen, EigenLayer said it was working with the trading platforms and law enforcement to find the hacker and hopefully recover the stolen funds.

The protocol clarified that the hack was an โ€œisolated incidentโ€ limited to the investorโ€™s email communication, and therefore, did not result from any vulnerabilities in its platform or smart contracts.

โ€œThe compromise has not impacted the broader ecosystem. There is no known vulnerability in the protocol or token contracts and this compromise was not related to any onchain functionality.โ€ EigenLayer wrote on X.

Per the statement, EigenLayer is still investigating the incident and has promised to update its community once additional information is uncovered. The protocol had not issued any further updates on the situation at the time of writing.

Stay updated on how much the crypto industry lost to hacks in September:
Hereโ€™s How Much the Crypto Industry Lost to Hacks in September

Read how Shezmu recently recovered millions in stolen funds:
Shezmu Recovers Millions in Stolen Cryptos After Negotiating with Hacker

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Brian Danga

Brian Danga is a crypto reporter at DailyCoin covering breaking news. Brian has minor holdings in Bitcoin and Ethereum.

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