After blockchain investigators reported a exploit incident, Initia suspended its Layer 1 blockchain and rollups. The incident allegedly allowed attackers to mint tokens without authorization and transfer over $2.6 million in crypto assets.
Initia posted on X at 3:41 PM UTC on Friday that the network has been paused due to a security incident. The team stated that it is working with security researchers, validators, and exchanges to determine the full scope of the impact.
Blockchain security researcher Spreek first identified the exploit on Friday, stating that the attacker minted tokens without authorization and converted approximately $2.6 million into other assets, with additional funds still in transit.
The DeFi platform D2 Finance later stated that the attacker exploited a vulnerability to mint 2 million AUSD tokens without sufficient collateral backing. Subsequently, the attacker transferred approximately 1.4 million AUSD, 105 Ether (ETH), and 1.08 million USDC to Ethereum via cross-chain bridges.
According to D2 Finance, the stolen assets were subsequently consolidated into an Ethereum wallet holding approximately 1,135.5 ETH, valued at $2.73 million. The company attributed the exploit to a vulnerability in a Move function that allowed attackers to create uncollateralized tokens and exchange them for assets on Ethereum.
Initia is a Layer 1 blockchain designed to support a network of interconnected rollups called Minitias. According to CoinGecko data, its native token, INIT, dropped to around $0.115 on Friday before rebounding above $0.15. At the time of writing, the token is trading at approximately $0.1496, up about 14% over the past 24 hours.
Initia has not publicly confirmed estimates of losses or the exact cause of the exploit, and the extent of the impact on users and the timeline for restoring network operations remain unclear. Cointelegraph was unable to reach Initia for further comment via its official X account.