The cryptocurrency market has been taken by surprise as the price of EIGEN experienced a remarkable 9% increase in just 24 hours. This unexpected surge comes amidst an ongoing investigation into an unauthorized $5.5 million token sale that has raised eyebrows in the crypto community. The sale in question is believed to have violated lock-up agreements designed to prevent employees and early investors from selling their tokens prematurely. Despite these challenges, market participants remain optimistic about the future trajectory of the EIGEN token.
$5.5M Unauthorized Token Sale Under Scrutiny
In a recent development, EigenLayer has launched an investigation into a suspicious wallet responsible for transferring 1.67 million $EIGEN tokens. These tokens, valued at approximately $5.5 million, were allegedly sold through a MetaMask wallet in violation of the established lock-up rules. These rules are crucial for maintaining market stability by preventing early investors and employees from trading their tokens before the agreed-upon date in September 2025. The flagged wallet, identified by Arkham Intelligence, has been linked to EigenLayer’s Gnosis Safe, sparking concerns about the company’s internal security measures.
EigenLayer is actively working to determine whether the unauthorized sale originated from an employee or an early investor. The team has committed to keeping the community informed as more details emerge.
Security Breach Behind the Sale
EigenLayer has confirmed to its community that the unauthorized sale was the result of a security breach, though it reassured stakeholders that the broader ecosystem remains unaffected. The breach involved the hacking of an email thread related to the unlocking of tokens, allowing the attacker to steal and subsequently sell 1.67 million $EIGEN tokens. The illicit proceeds were then swapped for stablecoins and transferred to centralized exchanges. Although some of the funds have been frozen, law enforcement agencies are actively working to recover the remaining assets.
In a communication update, EigenLayer emphasized that this incident was an isolated event and that its core protocol and token contracts were not compromised. The overall system integrity remains intact, ensuring the safety of the platform for its users.
Justin Sun’s Sell-off Adds to the Pressure
Adding to the EIGEN token’s recent challenges, Tron founder Justin Sun executed a significant sell-off shortly before the token sale controversy erupted. Sun sold 5.37 million EIGEN tokens, generating around $21 million from the sale of tokens he had received through airdrops. His decision to offload such a substantial quantity of tokens immediately after the token unlock on October 1 contributed to heightened selling pressure in the market. Sun subsequently allocated the proceeds of his sale into the Aave v3 protocol.
Despite these setbacks, the EIGEN token’s price demonstrated resilience, bouncing back as on-chain data revealed a renewed interest from investors. Many believe in the protocol’s long-term potential and are seizing the opportunity to acquire the token at current market prices.
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