EigenLayer investigates unauthorized EIGEN token sale, linking dumped tokens to team wallet

EigenLayer, announced an investigation into an unauthorized sale of 1.67 million EIGEN tokens, reportedly dumped through MetaMask at around $3.3 each.

Community Update

We are investigating unapproved selling activity associated with this wallet: (https://t.co/Pp9KoTfACp).

We will share our findings with the community as soon as possible.

— EigenLayer (@eigenlayer) October 4, 2024

The transaction, which may have violated EigenLayer’s strict one-year lockup schedule for employees and early investors, has raised questions around token security and internal compliance.

Arkham Intelligence identified the suspicious sale, which involved a wallet funded by EigenLayer’s multi-signature Gnosis Safe. According to blockchain analytics firm Lookonchain, the tokens were transferred from an EigenLayer team wallet before being sold via MetaMask, sparking concerns over internal oversight and token security.

According to the protocol’s lockup policy, current and former employees, as well as early investors, are restricted from selling or staking EIGEN tokens received from Eigen Labs until September 2025.

After that, only 4% of each recipient’s tokens will unlock monthly, with full vesting set for September 2027. The sale appears to have contravened these guidelines, as EIGEN tokens were only airdropped beginning on May 10, 2024, leaving the wallet under the initial one-year lockup.

EigenLayer unlocked its token on October 1, propelling it into the top 100 tokens by market capitalization, with a fully diluted valuation of $7.2 billion. Currently trading at $3.59, the token’s launch generated significant interest. However, the unusual selling activity has since sparked internal debate within EigenLayer’s team over token distribution and security protocols.

This article first appeared at Crypto Briefing