Initia Exploit Layer 1 Network Paused After Attacker Mints Unbacked Tokens and Drains $2.6 Million

Initia stopped its layer 1 chain and every connected rollup on Friday at 3:41 p.m. UTC after an attacker found a way to create tokens out of thin air. The team said it is working with security researchers, validators and exchanges to measure the full damage, and it has not yet confirmed the amount lost or the exact cause.

How the Initia Hack Worked

Security researcher Spreek raised the alarm first, reporting unauthorized minting and about $2.6 million swapped into other assets, with more funds still moving. D2 Finance then explained that a flaw in a Move function let the attacker mint 2 million AUSD without proper backing. Cross chain transfers sent roughly 1.4 million AUSD, 105 ETH and 1.08 million USDC over to Ethereum.

Where the Stolen Crypto Ended Up

According to D2 Finance, everything was gathered into one Ethereum wallet holding around 1,135.5 ETH, valued at $2.73 million.

INIT briefly slid to about $0.115 before recovering above $0.15, and it traded near $0.1336 at the time of writing, up about 14% in 24 hours. Initia is built to support a web of linked rollups called Minitias, and there is still no timeline for restarting the network or word on how users are affected.