Justin Sun Sells Off Another $14M in EIGEN Following Week of Controversy

Justin Sun has deposited 3.62 million EIGEN, valued at approximately $14.1 million, into Binance, following a tumultuous week for EigenLayer's recently launched token. Sun previously airdropped 5.24 million EIGEN (worth about $21.5 million) to HTX shortly after the token became tradable on October 1. Following these deposits, EIGEN's price, which spiked to $4.10, has since declined to around $4.00, suggesting a substantial volume of EIGEN sales.

EigenLayer, which aims to extend Ethereum's 'trust network' to other projects through the re-staking of already-staked ETH, has faced significant backlash due to recent operational mishaps. Critics argue that EigenLayer appears to operate more like a "trust me bro" system rather than leveraging Ethereum’s smart contracts, which are designed to minimise trust.

EigenLayer Faces Scrutiny Over Phishing Scam and Controversial Token Transactions

EigenLayer has been investigating “unapproved selling activity” linked to a wallet that received around 1.67 million EIGEN tokens. Later, the project disclosed that it had been compromised due to a phishing scam involving a malicious email. This breach allowed attackers to confirm test transactions and complete transfers without proper security protocols.

This incident is not the first time EigenLayer has faced scrutiny; it has previously been criticized for allowing investors to cash out via staking rewards with tokens that were supposed to be locked. Additionally, concerns have been raised about potential conflicts of interest involving EigenLayer advisors and their ties to the Ethereum Foundation.

Justin Sun’s Controversial Reputation

Justin Sun has been a controversial figure in the crypto space, with recent investigations into the proof of reserves for exchanges linked to him, such as HTX and Poloniex, revealing discrepancies in their underlying assets. Both exchanges were also victims of hacks last year.

Read more: TRON founder Justin Sun promotes Sunpump, netizens angrily accuse him of treating retail investors as fools

Conclusion

Sun’s recent EIGEN sell-off and the surrounding issues with EigenLayer highlight ongoing volatility and reputational risks within the cryptocurrency landscape. The combination of significant token sales, phishing attacks, and operational missteps has left investors wary as the market seeks stability.