Initia halts L1 and rollups after $2.7M token-mint exploit

Initia suspended its layer-1 blockchain and its rollup network at 3:41:30 p.m. UTC on Oct. 23, 2026, after an attacker created tokens without authorization and moved the proceeds to Ethereum. According to Ambcrypto, the consolidated funds totaled 1,135.52 ETH, then worth roughly $2.73 million.

The project confirmed the halt in a statement on X but said it had not established the amount lost or described the underlying flaw, Crypto.news reported. Blockchain researcher Spreek flagged the unauthorized minting first, estimating about $2.6 million had been cashed out while more funds were still moving.

Also read: Cysic Halts Bridge After Unauthorized Mint of 10M CYS Tokens

Key facts

• The attack began at 14:59:26 UTC on Oct. 23, when a single signed transaction minted 2 million AUSD tokens on Initia, consuming 135,888 gas and calling a Move function directly, per Ambcrypto.
• Roughly 153 seconds later, a LayerZero message released 1.4 million AUSD from the Ethereum-side adapter; the attacker also took 105 ETH from the native-ETH adapter and 1.08 million USDC through Circle’s CCTP, per Ambcrypto.
• Initia said the L1 and rollups were halted at 3:41:30 p.m. UTC on Oct. 23.
• Cointelegraph reported INIT briefly fell to about $0.115 on Friday before rebounding above $0.15, while Ambcrypto put it at $0.1484, up 11.7% over 24 hours.
• Agora, the issuer behind AUSD, disputed the account of the mint, saying it had no smart contracts deployed on Initia and that a third-party product using AUSD was involved, per Crypto.news.

How the funds moved off Initia

D2 Finance’s analysis, cited by Cointelegraph, described an attacker who exploited a Move function vulnerability to create unbacked tokens, then used cross-chain transfers to withdraw about 1.4 million AUSD, 105 ETH and 1.08 million USDC to Ethereum. Ambcrypto reported that the funds were swapped through decentralized trading services including 1inch and 0x, with roughly $2.65 million reaching Ethereum within about seven minutes of the initial mint.

The Defiant reported Ethereum records showing stablecoin swaps followed by a transfer of 1,135.5 ETH, according to Crypto.news. The out let noted that a full independent reconciliation of the transactions was not available.

Also read: Harmony to roll back blockchain after ONE exploit, discarding 109,000 transactions

Why it matters

The incident mirrors September’s Liquid Network case, where a software bug allowed unauthorized L-BTC to be created and real Bitcoin to be withdrawn, as Ambcrypto noted. The pattern shifts attention from bridge verification itself to the minting logic behind the tokens that bridges release.

Users of Initia-based applications face an open-ended outage: Initia’s statement gave no list of affected apps, no individual loss figures and no restart schedule. Crypto.news also reported Agora’s denial of having contracts on Initia, so the link between the created tokens and the assets received on Ethereum is not yet confirmed. Ambcrypto cited its own research showing crypto security losses rose 55% to $1.18 billion in the third quarter of 2026, with reported incidents climbing from 67 to 107.

The reports do not fully agree

Ambcrypto’s headline figure is $2.7 million; Crypto.news and Cointelegraph carried the $2.6 million estimate from Spreek. Cointelegraph and Ambcrypto put INIT near $0.15 at publication, but their 24-hour changes differ (about 14% versus 11.7%), and Cointelegraph reported a Friday low of about $0.115. These are not settled totals, and none of the outlets presented an audited loss figure. Prices for the token are volatile, and nothing here is financial advice.

What to watch

The next concrete markers are Initia’s promised verified updates through its official channels, the technical investigation’s reconciliation of the mint and bridge transfers, and any notice on when the L1 and rollups resume.

Disclaimer: This article reports on a security incident and is not financial advice. Crypto markets are volatile and prices can change quickly.

Reported by ambcrypto.com.

Sources: AMBCrypto, Crypto.news, Cointelegraph