Cryptocurrency security firm Peckshield has reported that EigenLayer, a decentralized staking protocol, suffered a significant security breach, resulting in the loss of approximately 1.67 million EIGEN tokens worth approximately $5.87 million.
According to Peckshield, the attacker quickly exchanged the stolen EIGEN for USDC and transferred most of the funds to the HitBTC exchange, while around 5,000 USDC was sent to Kraken.
EigenLayer confirmed the attack in an official statement on its X (formerly Twitter) account, explaining that the attack was the result of an email thread between an investor and the platform that was compromised. The incident occurred while the tokens were being held in custody, allowing a malicious attacker to take EIGEN tokens and redirect them to their own wallet.
The stolen EIGEN tokens were then sold through a decentralized exchange platform to be converted into stablecoins, which were then moved to centralized exchanges. In response, EigenLayer stated that they have been in contact with both the relevant exchanges and law enforcement and have managed to freeze some of the stolen funds.
EigenLayer clarified that the breach was isolated and did not impact the broader ecosystem. The company assured users that there were no vulnerabilities in the protocol or token contracts, and that the incident was not caused by any on-chain issues.
*This is not investment advice.