Initia halts blockchain after exploit allegedly drains over $2.6 million

Layer-1 network and rollups suspended after unauthorized token minting and cross-chain transfers to Ethereum

By LineZotpaper AI staff

Published23 October 2026

Updated23 October 2026

Read Time2 min

Sources2 outlets

Initia has halted its layer-1 blockchain and rollups after security researchers reported an exploit that allowed an attacker to mint tokens without authorization and drain more than $2.6 million in crypto assets. The network was stopped at 3:41 p.m. UTC on Friday following the security incident, the project said on X.

Initia suspended its blockchain and rollups on Friday after blockchain security researcher Spreek flagged an exploit in which an attacker minted tokens without authorization and converted approximately $2.6 million into other assets, with additional funds still being moved at the time of reporting.

DeFi platform D2 Finance said the attacker exploited a vulnerability to mint 2 million AUSD tokens without sufficient backing, then used cross-chain transfers to withdraw approximately 1.4 million AUSD, 105 Ether and 1.08 million USDC to Ethereum. The stolen assets were later consolidated into an Ethereum wallet holding about 1,135.5 ETH, worth roughly $2.73 million, according to D2 Finance. The firm attributed the exploit to a flaw in a Move function that allowed the attacker to create unbacked tokens and exchange them for assets on Ethereum.

Initia said in a post on X that it was working with security researchers, validators and exchanges to determine the full extent of the impact. The project has not publicly confirmed the estimated losses or the precise cause of the exploit, and the timeline for restoring network operations remains unclear.

The native token, INIT, briefly fell to around $0.115 on Friday before rebounding above $0.15, according to CoinGecko data. It was trading near $0.1496 at the time of writing, up roughly 14% over the previous 24 hours.

Initia is a layer-1 blockchain designed to support a network of interconnected rollups known as Minitias.

Analysis

Why This Matters

The exploit forced a full network halt, leaving users unable to transact on Initia's layer-1 and rollups until operations are restored.
The attacker's method, minting unbacked tokens through a flaw in a Move function, raises fresh questions about the security of Move-based blockchain architectures.
The token price swung sharply, briefly falling to around $0.115 before rebounding, showing how quickly market confidence can react to a security incident.

Background

Initia is a layer-1 blockchain built to support a network of interconnected rollups known as Minitias. Its operations rely on the Move programming language, which several blockchain projects use. When a vulnerability is found in a network's core functions, pausing the chain is a common emergency response to prevent further losses while the impact is assessed. The incident follows a recurring pattern in the crypto sector of token-minting exploits, in which attackers create unbacked assets and swap them for established tokens.

Key Perspectives

Initia: The project says it halted the network to respond to a security incident and is working with security researchers, validators and exchanges to establish the full impact. It has not yet confirmed the size of the losses or the root cause.

Security researchers: Spreek first flagged the exploit and D2 Finance traced the funds, describing a flaw in a Move function that let the attacker mint 2 million unbacked AUSD tokens and convert them into assets on Ethereum.

Users and market participants: With the network offline and losses unconfirmed, INIT holders face uncertainty over when trading can resume and whether any minted or stolen assets will be recovered.

What to Watch

Whether Initia publishes a post-mortem confirming the loss figure and the exact vulnerability.
The INIT token price, and whether it can hold the gains made since the network halt.
When the team reopens the layer-1 blockchain and rollups, and how exchanges respond in the meantime.

Sources

Initia halts network after security incident as attacker reportedly mints tokens · The Block
Initia halts blockchain after exploit reportedly drains over $2.6M · Cointelegraph

Checked

12 claims in this story checked against 1 source: 12 supported.

Show each claim

SupportedThe exploit allegedly drained more than $2.6 million.Cointelegraph.com News: “Initia halts blockchain after exploit reportedly drains over $2.6M”
SupportedInitia suspended its layer-1 network and rollups after unauthorized token minting and transfers to Ethereum.Cointelegraph.com News: “The blockchain suspended its layer-1 network and rollups after security researchers identified unauthorized token minting and millions in assets transferred to Ethereum.”
SupportedThe network halted at 3:41 p.m. UTC on Friday, according to Initia’s post on X.Cointelegraph.com News: “The network was halted at 3:41 p.m. UTC on Friday following a security incident, Initia said in a post on X.”
SupportedSpreek reported unauthorized minting, about $2.6 million converted into other assets and additional funds still moving.Cointelegraph.com News: “Blockchain security researcher Spreek first flagged the exploit on Friday, reporting that an attacker had minted tokens without authorization and converted approximately $2.6 million into other assets, with additional funds still being moved.”
SupportedD2 Finance said the attacker minted 2 million AUSD without sufficient backing.Cointelegraph.com News: “DeFi platform D2 Finance later reported that the attacker exploited a vulnerability to mint 2 million AUSD tokens without sufficient backing.”
SupportedThe attacker transferred about 1.4 million AUSD, 105 ETH and 1.08 million USDC to Ethereum.Cointelegraph.com News: “The attacker then used cross-chain transfers to withdraw approximately 1.4 million AUSD, 105 Ether (ETH) and 1.08 million USDC (USDC) to Ethereum.”
SupportedD2 Finance said the assets were consolidated into an Ethereum wallet with about 1,135.5 ETH worth roughly $2.73 million.Cointelegraph.com News: “The stolen assets were subsequently consolidated into an Ethereum wallet holding approximately 1,135.5 ETH, worth $2.73 million, according to D2 Finance.”
SupportedD2 Finance attributed the exploit to a Move-function vulnerability that let the attacker create unbacked tokens and exchange them for Ethereum assets.Cointelegraph.com News: “The firm attributed the exploit to a vulnerability in a Move function that allowed the attacker to create unbacked tokens and exchange them for assets on Ethereum.”
SupportedInitia said it was working with security researchers, validators and exchanges to assess the impact.Cointelegraph.com News: “The team said it was working with security researchers, validators and exchanges to determine the full extent of the impact.”
SupportedInitia had not publicly confirmed the estimated losses or precise cause, and the restoration timeline remained unclear.Cointelegraph.com News: “Initia has not publicly confirmed the estimated losses or the precise cause of the exploit, and the extent of the impact on users and the timeline for restoring network operations remain unclear.”
SupportedINIT fell to around $0.115, rebounded above $0.15, and was near $0.1496, up about 14% over 24 hours.Cointelegraph.com News: “Its native token, INIT, briefly fell to around $0.115 on Friday before rebounding above $0.15, according to CoinGecko data . The token was trading near $0.1496 at the time of writing, an increase of about 14% over the previous 24 hours.”
SupportedInitia is a layer-1 blockchain designed to support interconnected rollups called Minitias.Cointelegraph.com News: “Initia is a layer-1 blockchain designed to support a network of interconnected rollups, known as Minitias.”