Initia, a layer-1 blockchain built to support interconnected rollups, has halted operations after researchers reported an exploit that allegedly enabled an attacker to mint unauthorized tokens and convert them into crypto assets worth more than $2.6 million.
The network was stopped at 3:41 p.m. UTC on Friday, according to an announcement from Initia on X. The team said it is coordinating with security researchers, validators, and exchanges to assess the full scope of the incident.
Key takeaways
- Initia paused its layer-1 and rollups at 3:41 p.m. UTC after reports of an unauthorized token-minting exploit.
- Security researcher Spreek first flagged the issue, alleging minted tokens were converted into roughly $2.6 million in other assets.
- D2 Finance later described the mechanics as minting 2 million AUSD tokens without sufficient backing, followed by cross-chain withdrawals.
- The stolen value appears to have been consolidated into an Ethereum wallet, according to D2 Finance.
- Initia has not publicly confirmed the full losses or the exact root cause, leaving timelines and impact on users unclear.
How the alleged exploit worked
The initial public warning came from blockchain security researcher Spreek, who reported that an attacker minted tokens without authorization and then converted approximately $2.6 million into other assets, noting that more funds were still in motion.
DeFi platform D2 Finance then reported additional details, saying the exploit involved a vulnerability that allowed the creation of unbacked tokens—specifically, minting 2 million AUSD without sufficient backing. According to D2 Finance, the attacker used cross-chain transfers to withdraw about 1.4 million AUSD, 105 Ether (ETH), and 1.08 million USDC to Ethereum.
Where the funds appear to have landed
D2 Finance further said the stolen assets were consolidated into an Ethereum wallet holding approximately 1,135.5 ETH, which it valued at $2.73 million. The firm attributed the problem to a vulnerability in a Move function that allegedly permitted the attacker to create unbacked tokens and then exchange them for assets on Ethereum.
While these figures are tied to D2 Finance’s analysis and Initia has not independently published an official loss estimate, they provide a concrete picture of the likely attack path: mint, transfer across chains, then consolidate liquid assets on Ethereum.
Network halt raises questions for rollup-dependent apps
Initia’s stated response was immediate: halting its layer-1 and rollups after the security incident. That decision matters because Initia is designed to run a network of interconnected rollups, often described as “Minitias,” meaning many application flows may depend on the underlying chain’s availability and safety.
As of the halt, Initia had not publicly confirmed the estimated losses or the precise cause of the exploit, and the timeline for restoring network operations remains uncertain. The incident also underscores how token-minting vulnerabilities can become fast-moving events when they enable immediate conversion into other liquid assets—particularly when cross-chain bridges or withdrawal paths are involved.
Market reaction and what to watch next
In the hours following the incident, Initia’s native token, INIT, briefly fell to around $0.115 before rebounding above $0.15, based on CoinGecko data. At the time of writing, the token was trading near $0.1496, up about 14% over the previous 24 hours, though price moves during security incidents can reflect a mix of market positioning and rapidly changing expectations rather than confirmed recovery details.
With the core technical picture still not officially confirmed by Initia, traders and users will likely focus on follow-up updates: whether the team identifies and patches the specific Move function vulnerability, the total amount of assets affected (including any funds still being moved, as initially described by Spreek), and how validators and exchanges plan to coordinate risk controls during the halt. Until Initia publishes its own findings, much of the impact assessment will remain tied to the external analyses already shared publicly.
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