EIGEN Price Jumps 10% As EigenLayer Reveals Reason Behind $5.5M Token Sale

EigenLayer (EIGEN) price has jumped 9% in the last 24 hours, despite a struggle between bulls and bears for dominance. This price increase is taking place at the same time as investigations are ongoing into the allegedly unauthorised trading of $5.5m worth of EIGEN tokens, which may have violated the lock-up agreements for employees and early investors.

EigenLayer Probes Suspicious $5.5M Token Sale

EigenLayer is currently tracking a wallet that has transferred close to 1.67 million EIGEN tokens, worth approximately $5.5 million. The sale is alleged to have taken place through MetaMask, which could be in contravention of EigenLayer’s one year lockup arrangement. The lockup means that the current and former employees and early investors of EIGEN cannot transfer or stake any of their EIGEN tokens before September 2025.

The suspicious wallet, which was identified by Arkham Intelligence, was funded by EigenLayer’s multi-signature Gnosis Safe. This has given rise to questions on internal control and security measures in place within the organization. EigenLayer’s team is still investigating to find out if this incident was a sale by an employee or a former employee or even one of the early investors.

”We are currently looking into unapproved selling activity related to this wallet and will update the community with the details when possible,” the EigenLayer team tweeted on X (formerly Twitter).

Community Update: Incident Details

In its community update, EigenLayer explained that the suspicious sale was a consequence of a single incident of security compromise. Among them, one of the investor’s emails containing the instructions for the transfer of tokens to custody was hacked by an attacker.

The attacker was able to transfer 1,673,645 EIGEN tokens to another account, and sell them through a decentralized swap platform. The stolen money was then swapped for stablecoins and sent to centralized exchanges.

“We are in contact with these platforms and law enforcement. A portion of the funds have already been frozen,” EigenLayer stated. The update also emphasized that the broader ecosystem remains secure. “There is no known vulnerability in the protocol or token contracts, and this compromise was not related to any onchain functionality.”

Justin Sun’s Involvement and Token Sell-Off

The investigation is coming only a few days after the Tron founder Justin Sun has sold a significant amount of his EIGEN tokens. According to reports, Sun sold 5.37 million EIGEN tokens at an average of $4.03 per token, making approximately $21 million in profit from tokens received in airdrops via EigenLayer’s Ethereum ReStaking track.

Sun’s decision to sell most of his tokens just a day after the token unlocking on October 1st created more selling pressure, which caused concern about price fluctuations.

Following the sale of his EIGEN tokens, Sun deposited the revenue in USDT into the Aave v3 protocol, an Ethereum-based decentralized money market. 

EIGEN Price Skyrockets Despite Investigation

Despite the unauthorized token sale and Justin Sun’s recent sell-off, EIGEN has rebounded, experiencing a 9% price increase over the past 24 hours. Investors are weighing the potential long-term value of EigenLayer’s protocol, which remains one of the most innovative solutions in Ethereum’s DeFi ecosystem.

Since its October 1 unlocking event, the token has seen increased volatility, initially dropping 23% from recent highs. However, on-chain data indicates that some investors are accumulating EIGEN tokens, betting on future growth. For example, one whale purchased over 31,000 EIGEN tokens after the sell-off, suggesting confidence in the protocol’s prospects despite recent setbacks.

EigenLayer has quickly become a major player in Ethereum’s DeFi landscape with its pioneering “restaking” model, allowing users to reuse staked ETH to secure decentralized applications. As of early October, the protocol’s total value locked (TVL) stands at $10.8 billion, ranking it among the top three DeFi platforms, alongside Lido and Aave.

The post EIGEN Price Jumps 10% As EigenLayer Reveals Reason Behind $5.5M Token Sale appeared first on CoinGape.