Optimism Token Flash Crashes 10% on False Rumors of a Major Hack

The layer 2 system’s token fell 10% on Wednesday before rebounding to its pre-crash price after its team clarified it had not been hacked for $450 million.

By Eli Tan

Aug 17, 2022 at 9:59 p.m. UTC

Updated Aug 17, 2022 at 10:16 p.m. UTC

CDCROP: Optimism co-founder Jinglan Wang (Brady Dale for CoinDesk) — Optimism co-founder Jinglan Wang (Brady Dale for CoinDesk)

Eli Tan

Eli is a news reporter for CoinDesk. He holds ETH, SOL and AVAX.

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The native token for Ethereum layer 2 blockchain Optimism briefly crashed in price on Wednesday after Twitter-based rumors spread that its multisignature wallet had been hacked.

Optimism’s core team insists there was no hack. Still, the OP token fell 10% in a matter of minutes at 5:15 p.m. ET, according to data from CoinMarketCap, before rebounding.

On messaging platform Discord, the team clarified that the fund movements were preplanned Coinbase Custody-related transfers to investor wallets. The value of the funds transferred is around $450 million, according to Etherscan data.

The hasty response has sent the token’s price movement in the opposite direction; it has since rebounded off its low of $1.27 to $1.34, or slightly below its pre-crash level.

In the aftermath of the flash crash Optimism said it “expected” some “confusion” around the unannounced fund transfer.

“We will announce large planned transfers ahead of time to avoid further confusion going forward,” it also said on Twitter.

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Optimism Exploits Multisig Wallet

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