TL;DR
- EigenLayer, a prominent Ethereum restaking protocol, suffered a significant loss of $5.7 million worth of EIGEN tokens due to a phishing attack on October 4, 2024.
- The attacker gained access to email communications between the investor, the custodian, and EigenLabs, authorizing the transfer of 1.6 million EIGEN tokens.
- EigenLayer initiated an investigation, collaborating with third-party security firms and law enforcement, resulting in the freezing of a substantial portion of the stolen funds.
EigenLayer, a prominent Ethereum restaking protocol, suffered a significant loss of $5.7 million worth of EIGEN tokens. The incident, which occurred on October 4, 2024, involved an unauthorized liquidation of 1.6 million EIGEN tokens from an investor’s wallet.
Following our first report of this isolated incident involving multiple parties on October 4th, 2024, the investigation of this incident has been completed. The incident did not affect our website, any protocol or token smart contracts, and was not related to any onchain… https://t.co/3f0G1IyPJY
— EigenLayer (@eigenlayer) October 29, 2024
The attack was executed through a sophisticated phishing scheme that compromised email communications between the investor, the custodian, and EigenLabs.
Attack Details
The attacker gained access to an email thread discussing the transfer of the investor’s tokens to a custodian. By creating lookalike emails, the hacker posed as both the investor and the custodian, authorizing the transactions without raising suspicion.
The attacker confirmed a test transaction and subsequently executed the transfer of 1,673,645 EIGEN tokens. These tokens were then sold via a decentralized swap platform and converted to stablecoins, which were transferred to centralized exchanges.
Investigation and Response
EigenLayer promptly initiated an investigation into the incident, emphasizing that the breach did not affect the protocol’s internal infrastructure, including its website, internal restaking protocols, and token smart contracts.
The investigation focused on analyzing the token transfer approval process to identify vulnerabilities and implement improvements to prevent future incidents. The protocol collaborated with third-party security firms, including SlowMist, to conduct a thorough investigation.
SlowMist confirmed that the attack was an external malicious act, resulting from a phishing attack that compromised an investor’s employee. Law enforcement agencies were involved, and a substantial portion of the stolen funds was frozen.
Impact on EIGEN Token
Following the incident, EigenLayer’s native asset, EIGEN, experienced a significant dip in value. The token, which had surged to an all-time high of $4.53 at the beginning of October, saw a decline of over 17% in the last seven days, trading at $2.81 with a market cap of $531.2 million.
Despite the breach, EigenLayer assured investors that their funds would be secure when transferred to custodians, and new security measures have been implemented to minimize risks in the future.
The EigenLayer phishing attack highlights the importance of robust security measures and vigilance in the cryptocurrency space. As the protocol continues to enhance its security protocols, the incident serves as a reminder of the ever-present threats in the digital asset landscape.
