Initia Halts Blockchain After Reported $2.6M Token Exploit

Initia halted its layer-1 blockchain and interconnected rollups, known as Minitias, at 3:41 p.m. UTC on Friday following a reported security incident. The team said it was coordinating with security researchers, validators and exchanges to assess the impact, while blockchain researcher Spreek reported that an attacker had minted tokens without authorization and transferred more than $2.6 million in 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. The proceeds were reportedly consolidated in a wallet holding about 1,135.5 ETH, valued at $2.73 million at the time.

Initia’s native INIT token briefly dropped to roughly $0.115 before recovering to approximately $0.1496, a 14% gain over the previous 24 hours, according to CoinGecko. The network’s native token remained volatile as users assessed the potential consequences of the exploit and the temporary suspension of operations.

Initia has not publicly confirmed the estimated losses or the precise cause of the vulnerability. The extent of the impact on users and the timeline for restoring the blockchain and its rollups also remained unclear.