EigenLayer has assured its community that its platform remains secure despite an investor losing $5.5 million worth of EIGEN tokens in a recent email breach.

The attack coincided with ongoing criticism over EigenLayer’s transparency regarding staking and listing its tokens on major exchanges.

The attack that stole $5.5 million

On October 4, Ethereum restaking protocol EigenLayer revealed that an investor’s email thread was compromised by a malicious attack. This led to the theft of 1,673,645 EIGEN tokens, valued at approximately $5.5 million.

The company explained that the hacker intercepted email communication, leading the investor to send the tokens to the wrong address. The stolen tokens were quickly sold on a decentralized exchange, converted into stablecoins, and transferred to centralized exchanges to cover their tracks.

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EigenLayer collaborated with several exchanges and law enforcement agencies. Furthermore, it claimed to have managed to freeze a portion of the stolen funds. The restocking platform further clarified that the breach originated solely from compromised email communication and was not related to the security of the platform’s smart contract or protocol.

“The compromise did not impact the broader ecosystem. There is no known vulnerability in the protocol or token contracts and this compromise was not related to any onchain functionality. We are continuing to investigate the situation and will release more information as soon as we have it,” EigenLayer said.

The team has since strengthened its security measures, particularly in relation to investor communications, reaffirming that the platform remains secure overall.

Why is EigenLayer being criticized?

However, the incident has drawn attention to the platform’s token locking policies. Observers noted that EigenLayer did not employ the typical one-year lockup period often seen among token issuers. This raises concerns about unauthorized transactions by large token holders.

EigenLayer’s policy currently restricts early investors and team members from selling or staking EIGEN tokens until September 2025. Tokens will be gradually unlocked at a rate of 4% per month until September 2027. However, recent token movements have led some to question the effectiveness of these restrictions.

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EIGEN Token Price Performance. Source: BeInCrypto

EigenLayer is one of the top three DeFi platforms with over $10 billion in total value locked (TVL). Additionally, following its token launch on October 1, EIGEN briefly entered the top 100 tokens by market cap with a fully diluted valuation of over $7 billion.

The article After $5.5 million theft, EigenLayer says it is safe appeared first on BeInCrypto Brazil.