Key Takeaways:
- After facing a security incident due to unauthorized token mints, Initia has suspended its Layer 1 and has integrated rollups onto its network.
- Initial estimates of the attacker’s outflow from the AUSD, ETH and USDC projects hover around $2.7 million.
- Full effects are not confirmed and Initia stated it was working with the validators, exchanges, and security teams.
Initia has suspended its blockchain infrastructure after an exploit reportedly allowed an attacker to mint unbacked tokens and move millions of dollars in crypto to Ethereum.
As of Oct 23, 2026, 3:41:30 PM UTC, the Initia L1 and Rollups have been halted due to a security incident.
Our team is actively investigating the situation and working to establish the full scope of any impact with security teams, validators, and exchanges.
We will share verified information through our official channels as it becomes available.
Please remain cautious of unofficial links, messages, or claims circulating during this time.
— Initia 🪢 (@initia) October 23, 2026
As investigators dig into the damage, the network halt started at 3:41:30 p.m. UTC on Oct. 23, including the Initia Layer 1 network and its rollup network.
Initia Network Halt Follows Unauthorized Token Minting
Blockchain security researcher, Spreek, first spotted the incident, stated that one attacker had “infiniminted” tokens and is already shorting out around $2.6 million, with more funds on the way.
Later Initia acknowledged the security incident but not the exact vulnerability nor the amount that was lost. The team, in collaboration with security engineers, validators and exchanges, was investigating the extent of the hack.
The latest preliminary remarks by Initia founder Ezaan Mangalji hinted that a previously unidentified bug is present in MoveVM’s Cosmos SDK implementation. The issue has allowed unauthorized token minting, but has not impacted native INIT tokens, he said. We are told that the attacker has reportedly tapped $2.7 million worth of AUSD, ETH and USDC before the chain is suspended.
Read More: Bitget Halts Withdrawals After $351.6M Hot Wallet Incident Hits Crypto Exchange
Exploit Reportedly Targeted AUSD
The hacker used the Move-related vulnerability to create 2 million AUSD without the necessary support, according to D2 Finance.
They found that approximately 1.4 million AUSD, 105 ETH and 1.08 million USDC were also transferred to Ethereum later on, through the platform. The money was then swept into an Ethereum wallet, per the incident report paraphrased by the crypto researchers.
Initia has not independently verified all those numbers yet, and the final loss estimate could vary as more details become available in the investigation.
INIT Price Rebounds Despite Security Scare
At first the exploit had their way with INIT, but the token quickly bounced back. According to CoinGecko data, INIT’s price has hovered around $0.148 during the past 24 hours, trading by approximately $0.114 to $0.156 over that period. As it became one of the hot market events, trading volume also rose significantly.
That bounce has occurred despite the network not being terminated, implying some traders were viewing the reported minting bug as distinct from the INIT native token.
Initia Investigates Scope Before Restarting Network
The core of Initia is its Layer 1-based mainnet, which will feature connected application-specific rollups, commonly known as Minitias. Stopping any base chain and rollups helps affect a wider ecosystem than just stopping one application.
Restart timeline not announced for the project. It has also not yet issued a definitive report on the extent of the damage to the assets, the losses of the users, nor clear action for remediation.
In the meantime, the main questions are if the vulnerability applied to just one function in MoveVM, to see if it had let more tokens out of the ecosystem, and to determine the extent of the loss until the validators halted the chain.
Read More: Qubic Halts Chain After 2.94T QU Drain Hits 1,404 Wallets in Weak-Seed Security Exploit
The post Initia Halts L1 and Rollups After $2.7M Exploit Tied to Unauthorized Token Minting appeared first on CryptoNinjas.
