Initia Halts Blockchain After Reported $2.6M 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 crypto assets to Ethereum. The team said it was coordinating with security researchers, validators and exchanges to assess the incident’s full impact.

Blockchain security researcher Spreek first identified the suspected exploit, reporting that an attacker minted tokens without authorization and converted them into other digital assets. DeFi platform D2 Finance said the attacker used a vulnerability in a Move function to create 2 million unbacked AUSD tokens, then withdrew approximately 1.4 million AUSD, 105 ETH and 1.08 million USDC to Ethereum through cross-chain transfers.

The stolen assets were reportedly consolidated in an Ethereum wallet containing about 1,135.5 ETH, valued at $2.73 million at the time. Initia’s native INIT token briefly dropped to approximately $0.115 before recovering to around $0.1496, a gain of roughly 14% over the preceding 24 hours, according to CoinGecko.

Initia, a layer-1 network designed to support interconnected rollups called Minitias, has not publicly confirmed either the estimated losses or the precise cause of the vulnerability. The network’s restoration timeline and the extent of any impact on users remained unclear.