Malicious Attack Sees Attacker Hijack $5.5 Million Worth of Tokens

Eigenlayer has reported an event stating that it lost $5.5 million worth of tokens when a suspicious wallet address took control of a transfer and redirected it to an unauthorized address. It was said to be a malicious attack. 

With increasing attacks on cryptocurrency firms and firms bolstering their security, we seem to be witnessing newer breach techniques by the day. Eigenlayer, a protocol restaking platform for Ethereum tokens, has announced an attack that exposed yet another breach medium.

On Friday the platform announced that an attack on Eigenlayer’s system redirected a token transfer from the designated recipient to an attacker’s address. The occurrence on Friday placed traders on red alert, who believed that someone from within the firm, rather than an outsider, was responsible for the error.

The individual who may be an employee or pioneer investor drew attention when the lockup time set for the token was breached, leading to sales of tokens some days after it was listed for trading and less than 12 after its May 10th airdrop launch.

Describing the nature of the attack, Eigenlayer mentioned that an email which conveyed a transfer request by an investor was hijacked by a malicious attacker which led to 1,673,645 EIGEN tokens being cornered from its authorized destination to the attackers address.

The statement from Eigenlayer went further to mention that upon successful collection of the tokens, the tokens were exchanged for stablecoins which were later sent to centralized financial platforms. Eigenlayer went further to say that a fraction of the stolen funds have been frozen and that its working with the centralized platforms and law enforcement agencies to possibly recover all the stolen funds. 

Speaking about the security of its platform, Eigenlayer assured traders that the attack is not a result of a breach of its on chain systems or a weakness in the protection of its token contracts or protocols.