Layer-1 Blockchain Initia Suspends Network After $2.6M Exploit
Initia shut down its layer-1 network and rollups following an unauthorized token minting attack that siphoned millions to Ethereum, with the INIT token tumbling before recovering.
Network Halted Following Security Breach
Initia, a layer-1 blockchain designed to coordinate a network of interconnected rollups called Minitias, suspended operations on Friday after security researchers uncovered an exploit enabling attackers to mint tokens without proper authorization. According to Initia’s announcement on X, the network shutdown occurred at 3:41 p.m. UTC. The team initiated coordination with security researchers, validators, and exchanges to assess the full scope of the incident’s damage.
Attacker Drains Millions Across Chains
Blockchain security researcher Spreek brought the vulnerability to light, identifying that an attacker had generated tokens illicitly and moved approximately $2.6 million in cryptocurrency to other blockchains. D2 Finance, a decentralized finance platform, subsequently revealed more details: the attacker exploited a flaw in a Move function to create 2 million AUSD tokens without adequate collateral backing them. The perpetrator then leveraged cross-chain bridges to extract roughly 1.4 million AUSD, 105 Ether, and 1.08 million USDC to Ethereum. Once consolidated on Ethereum, the stolen holdings totaled approximately 1,135.5 ETH, valued at roughly $2.73 million, according to D2 Finance’s analysis. The vulnerability stemmed from a weakness that permitted the creation of unbacked tokens, which the attacker then traded for legitimate assets on Ethereum-based exchanges.
Token Rebound Amid Uncertainty
Initia’s native token, INIT, experienced sharp volatility following the exploit’s discovery. The token initially crashed to approximately $0.115 before recovering to above $0.15 the same day. As of the reporting window, INIT traded near $0.1496, reflecting a roughly 14% gain over the previous 24-hour period. However, significant questions remain unresolved: Initia has not yet publicly confirmed the total loss figure or provided technical details explaining the exploit’s mechanics. The timeline for restoring network operations and the full extent of user impact also remain undisclosed. Media outlets attempting to reach Initia for additional detail through its official X account were unsuccessful.
This incident underscores the ongoing security challenges facing emerging blockchain networks and the critical importance of rigorous code auditing before mainnet deployment.
Source: Initia, via Cointelegraph. Not financial advice.