Initia halts its blockchain after a $2.6 million exploit

what happened

Initia halted its layer-1 blockchain and rollups on Friday at 3:41 p.m. UTC after blockchain researchers reported an exploit, according to Cointelegraph. The attacker reportedly minted tokens without authorization and converted them into other assets worth more than $2.6 million. The team said it is working with security researchers, validators and exchanges to determine the full scope of the damage.

DeFi platform D2 Finance said the attacker used a flaw in a Move function to mint 2 million AUSD without sufficient backing. Through cross-chain transfers, the attacker then withdrew about 1.4 million AUSD, 105 ETH and 1.08 million USDC to Ethereum. The stolen assets were later pooled into one Ethereum wallet holding roughly 1,135.5 ETH, which D2 Finance valued at $2.73 million.

Initia has not confirmed the estimated losses or the exact cause of the exploit. INIT briefly dropped to around $0.115 on Friday before recovering above $0.15, and CoinGecko data showed a gain of about 14% over 24 hours. No timeline for restoring network operations has been given.

why it matters

For markets, this is a reminder of the risk in cross-chain transfer infrastructure. The network halt and unclear loss figures weigh on confidence in INIT and the Initia ecosystem. It is still unknown how users will be compensated and when the network will resume operations.

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