Cryptoupdated 42m ago2 min read
Initia Halts Blockchain After Unauthorized Token Minting, Transfers $2.6M to Ethereum
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Initia halted Layer-1 and rollups after exploit enabled unauthorized token minting and transfers to Ethereum. Security researchers attributed $2.6 million drained, with additional funds moving as attacker cashed out.
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Chain halted after minting
Initia halted its layer-1 blockchain and rollups after security researchers reported unauthorized token minting and millions in assets transferred to Ethereum.
Initia said the network was halted at 3:41 p.m. UTC on Friday following a security incident, and the team said it was working with security researchers, validators and exchanges to determine the full extent of the impact.
Blockchain security researcher Spreek first flagged the exploit on Friday, reporting that an attacker had minted tokens without authorization and converted approximately $2.6 million into other assets, with additional funds still being moved.
DeFi platform D2 Finance later reported that the attacker exploited a vulnerability to mint 2 million AUSD tokens without sufficient backing, and the attacker then used cross-chain transfers to withdraw approximately 1.4 million AUSD, 105 Ether (ETH) and 1.08 million USDC to Ethereum.
ETH transfer and disputes
D2 Finance said the stolen assets were consolidated into an Ethereum wallet holding approximately 1,135.5 ETH, worth $2.73 million, while The Defiant reported Ethereum records showing stablecoin swaps followed by a transfer of 1,135.5 ETH.
Agora disputed the AUSD minting account, saying it has no smart contracts on Initia, and Agora also said it “has no smart contracts deployed on Initia,” limiting its freeze response to chains where AUSD contracts are deployed.
Agora said it would freeze funds related to hacker addresses that hold $AUSD on chains where $AUSD/Agora smart contracts are deployed, and it framed the distinction as targeting bridge backing rather than just tokens held in an attacker’s wallet.
Initia confirmed in its Oct. 23 statement that the suspension took effect at 3:41:30 p.m. UTC, while the announcement identified a security incident but did not establish the amount lost or describe the underlying vulnerability.
What comes next for users
Initia urged users to remain cautious about unofficial links, messages and claims circulating during the investigation, as it said both the base blockchain and its rollups had stopped. The Block said Co-founder Ezaan Mangalji, who goes by Zon, said preliminary findings pointed to a previously unknown "Day 0" bugin the network’s MoveVM implementation on Cosmos SDK that allowed unauthorized token minting but "does not apply to native INIT tokens."
The Block added that the attacker was able to mint and bridge out ~$2.7m worth of AUSD, ETH, and USDC before the chain was paused, while Initia still had not confirmed the amount lost. TradingView reported that Initia’s native INIT token briefly fell to around $0.115 on Friday before rebounding above $0.15, and the token was trading near $0.1496 at the time of writing, an increase of about 14% over the previous 24 hours.