Initia Halts Blockchain After $2.6M Token-Minting Exploit

Initia halted its layer-1 blockchain and interconnected rollups at 3:41 p.m. UTC on Friday after security researchers identified unauthorized token minting and transfers worth more than $2.6 million. The project said it was coordinating with researchers, validators and exchanges to assess the incident and determine the scope of user impact.

Blockchain security researcher Spreek first flagged the exploit, reporting that an attacker had minted tokens without authorization and converted the proceeds into other digital assets. According to DeFi platform D2 Finance, the attacker exploited a vulnerability in a Move function to create 2 million unbacked AUSD tokens. Cross-chain transfers were then used to withdraw approximately 1.4 million AUSD, 105 Ether (ETH) and 1.08 million USDC to Ethereum.

The stolen assets were reportedly consolidated in an Ethereum wallet containing about 1,135.5 ETH, valued at $2.73 million when cited by D2 Finance. Initia’s native INIT token briefly dropped to roughly $0.115 before recovering to $0.1496, representing a 14% gain over the previous 24 hours at the time of publication.

Initia has not publicly confirmed the estimated losses or the precise cause of the vulnerability. The impact on users, the potential recovery of stolen funds and the timeline for restoring the Initia blockchain and its Minitia rollups remained unclear.