Initia Halts Network After Reported $2.6M Token-Minting Exploit

Initia halted its layer-1 blockchain and interconnected rollups at 3:41 p.m. UTC on Friday after blockchain researchers reported an exploit that enabled an attacker to mint tokens without authorization and transfer more than $2.6 million in assets to Ethereum.

Security researcher Spreek first identified the incident, reporting that the attacker minted 2 million AUSD tokens without sufficient backing. According to DeFi platform D2 Finance, the attacker then used cross-chain transfers to withdraw approximately 1.4 million AUSD, 105 Ether (ETH) and 1.08 million USDC to Ethereum. The stolen assets were consolidated in a wallet holding about 1,135.5 ETH, valued at roughly $2.73 million.

D2 Finance attributed the exploit to a vulnerability in a Move function that allowed unbacked tokens to be created and exchanged for assets on Ethereum. Initia said it was working with security researchers, validators and exchanges to assess the incident, but the company had not publicly confirmed the estimated losses or the precise cause of the vulnerability.

Initia's native INIT token briefly fell to around $0.115 before recovering to approximately $0.1496, representing a 14% gain over the previous 24 hours, according to CoinGecko. The network's restoration timeline and the full impact on users remained unclear.