Ethereum staking protocol Swell has paused deposits and withdrawals for its liquid staking token swETH and liquid restaking token rswETH after both contracts reported exchange rates that no longer matched the ETH they actually hold. The pause was announced on Friday, October 23, 2026, after swETH was quoting roughly 1.203 ETH per token, about 6% above the last clean reading of 1.133, while rswETH printed near 1.138 ETH, about 5% above its 1.082 baseline.
Swell said it is working with security partners and Seal911 to secure its infrastructure and that returning net asset value to the correct value is the next step before reopening deposits and withdrawals. The team stated that all funds are safe and warned users to expect an increase in phishing attempts while the situation remains unresolved.
The first red flag appeared on Wednesday, October 21, when on-chain analyst Spreek reported that admin keys controlling the two tokens appeared to be compromised and that four malicious upgrade contracts had been deployed. Spreek estimated those contracts could drain approximately 2,500 ETH, worth about $5.9 million at Ethereum's recent price near $2,360, but noted the contracts had not been queued through the multisig. Swell acknowledged the reports the next day, saying no ETH had left the swETH or rswETH withdrawal or deposit contracts.
On secondary markets, traders priced in the uncertainty before the pause was resolved. swETH changed hands at about 1.089 WETH in a Uniswap pool with roughly $143,000 of liquidity, while rswETH fetched near 1.029 WETH on Curve. That represented discounts of about 9.5% for swETH and 9.6% for rswETH against the contract-reported rates. With withdrawals frozen, the usual arbitrage redemption path is closed, leaving the discount as a measure of holder confidence that Swell will correct the accounting and reopen.
