Eigen's locked EIGEN tokens sold off for 5.5 million EUR, EigenLayer releases investigation results

The Ethereum re-collateralization protocol EigenLayer is investigating a suspicious incident of EIGEN token sale, where around $5.5 million worth of EIGEN tokens, originally meant to be locked up, were recently dumped on the market. These tokens were traced back to a wallet possibly associated with employees, former employees, or early investors, violating the token lock-up period, causing an uproar in the community. EigenLayer announced the investigation results on 10/5.

Investors Violate Token Lockup Period at EigenLayer

On October 5th, EigenLayer publicly announced that they are investigating unauthorized token sales. The team stated: "We are investigating unauthorized sales activities associated with the wallet and will share the investigation results with the community as soon as possible."

According to data from Arkham Intelligence, a monitored wallet received funds from EigenLayer's multisignature Gnosis Safe. So far, the wallet has sold over 1.67 million EIGEN tokens, indicating a potential violation of the lockup period.

EigenLayer Response: Investor Email Compromised

Following the investigation, EigenLayer revealed that an email involving a transfer of tokens to a custodial state by an investor was compromised by malicious actors.

As a result, 1,673,645 EIGEN tokens were mistakenly transferred to the attacker's address. The attacker sold these stolen EIGEN tokens on decentralized exchanges and moved stablecoins to centralized exchanges. EigenLayer is in contact with these platforms and law enforcement, and some funds have been frozen.

Lockup Rules for Employees and Investors

To prevent early sale of EIGEN tokens by employees and investors, EigenLayer has established strict token lockup rules. The protocol prohibits current and former employees from staking the EIGEN tokens they received from Eigen Labs on the platform before September 30, 2025. Additionally, any token sales are frozen until 2025 to ensure compliance with the lockup schedule by early contributors.

As per the official lockup schedule, starting from September 2025, each token recipient's EIGEN allocation will unlock by 4% monthly until September 2027 when all tokens for employees and investors are fully unlocked. EigenLayer clarifies in their documentation that "investors and early contributors will adhere to the lockup schedule," and any early sales would directly violate these terms.

Questions arise about the transparency of EigenLayer's token EIGEN, and the reasons behind the lackluster performance of EIGEN.

Role of EigenLayer in the Ethereum Ecosystem

EigenLayer is known for its innovative "re-staking" model, a cryptographic economic security framework that uses staked ETH to secure various decentralized applications. The protocol plays a significant role in enhancing the security and functionality of the Ethereum ecosystem, so any irregularities in token distribution garner widespread community attention.

However, the security framework provided by EigenLayer remains a relatively unnoticed entity in the market; whether the market appeal of the re-staking ecosystem can continue depends on further economic effects or real-world applications to sustain this narrative.