Initia Blockchain Halted After $2.6M Token Minting Exploit

Initia halted its layer-1 blockchain and interconnected rollups at 3:41 p.m. UTC on Friday after researchers reported an exploit that enabled unauthorized token minting and the transfer of more than $2.6 million in digital assets. The team said it was coordinating with security researchers, validators and exchanges to assess the incident and its impact on users.

Blockchain security researcher Spreek first identified suspicious activity, reporting that the attacker minted tokens without authorization and converted the proceeds into other crypto assets. According to DeFi platform D2 Finance, the attacker exploited a vulnerability in a Move function to create 2 million unbacked AUSD tokens. The attacker then used cross-chain transfers to withdraw approximately 1.4 million AUSD, 105 Ether and 1.08 million USDC to Ethereum.

D2 Finance said the stolen funds were consolidated into an Ethereum wallet containing roughly 1,135.5 ETH, valued at $2.73 million at the time. Initia has not yet publicly confirmed the estimated losses or the precise technical cause of the exploit, and the full scope of any user losses remains under investigation.

Initia is a layer-1 network built around interconnected rollups called Minitias. Its native INIT token briefly dropped to about $0.115 before recovering above $0.15 and trading near $0.1496, a gain of roughly 14% over the previous 24 hours. The timeline for restoring the blockchain and its rollups remains unclear.