Quick Breakdown
- Kiln Finance begins orderly withdrawal of Ethereum validators after SwissBorg-linked hack.
- Over 1.6 million ETH is currently in the exit queue, but most funds are expected to be restaked.
- Educator Anthony Sassano dismisses fears of large-scale ETH sell-off.
Sassano: “No Reason to Panic”
Ethereum may face a spike in validator exits in the coming weeks, but market watchers should not expect a flood of selling, according to Ethereum educator Anthony Sassano.
“This ETH will presumably be restaked using new validator keys, aka it’s not going to be sold,”
Sassano wrote on X, reassuring traders concerned about selling pressure.
Kiln Finance Responds to SwissBorg Hack
The concerns stem from Kiln Finance’s decision to withdraw its validators following a security breach linked to SwissBorg, a Swiss crypto wealth management firm.
Hackers exploited a vulnerability in Kiln’s staking partner API, siphoning roughly 193,000 Solana (SOL) tokens from SwissBorg’s Earn program. In response, Kiln announced it had begun an “orderly exit” of all Ethereum validators to ensure client funds remain safe.
“Following our announcement yesterday regarding the Solana incident involving SwissBorg, Kiln is taking additional precautionary measures to safeguard client assets across all the networks,”
Kiln Finance said.
According to the firm, the withdrawal process will take between 10 and 42 days, depending on validator activity.
Validator Queue at 1.6 Million ETH
Data from ValidatorQueue shows that 1,628,074 ETH are currently queued for exit, even as roughly 35.5 million ETH — nearly 29.4% of the total supply — remains staked.
Despite the rising exit queue, Ethereum has seen both large inflows and outflows of validators in recent months. On August 28, more than 1 million ETH were reported as waiting for withdrawal in what analysts called the largest validator exodus in Ethereum history. Just days later, on September 3, staking demand surged again, with institutions and treasuries driving the entry queue to its highest levels since 2023.
At press time, Ether (ETH) is trading at $4,306 after a 70% surge in 24h volume and rising futures open interest, per CoinMarketCap.
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