Kiln, one of the largest enterprise staking platforms with over $2.4 billion in assets and 17,700 active validators, is exiting all of its Ethereum validators as a precautionary security measure following a $41 million hack on its partner SwissBorg. The attack occurred on September 8, 2025, when malicious actors used leaked API keys to access funds, including Solana (SOL) holdings, representing approximately 1% of SwissBorg's total assets under management.
In response to the security breach, Kiln CEO Laszlo Szabo announced the staged withdrawal of all Ethereum validators beginning September 10, 2025, which is expected to take between 10 and 42 days to complete. During this period, stakers will continue to accumulate rewards but may face up to nine days to fully access their withdrawn ETH. The exact volume of Ether staked by Kiln remains undisclosed.
The massive validator exit has caused Ethereum's staking exit queue to balloon to approximately 2.46 million ETH, compared to only 800,000 ETH waiting to be staked. This represents a significant reversal from earlier in September when the entry queue briefly surpassed withdrawals for the first time since July. The current congestion means investors face a prolonged wait period of around 43 days to exit their positions, while those looking to stake new assets face a delay of nearly two weeks.
SwissBorg has committed to fully reimbursing all clients affected by the hack, and Kiln has paused certain services while reinforcing its infrastructure. The company plans to release a post-mortem once its internal review concludes.