Initia halts its layer-1 network and rollups after assets worth about $2.7 million are moved

Key Facts

Initia halted its layer-1 network and rollups after a security incident enabled unauthorized token minting and the transfer of assets off the network, The Block and Cointelegraph reported on October 23, 2026. Co-founder Izan Mangalaj estimated that AUSD, ETH and USDC tokens minted and transferred before the chain was halted were worth about $2.7 million. Separately, researcher Spreek said the attacker had spent about $2.6 million, with other funds still being transferred. These estimates do not represent a final loss tally: Initia said it had not confirmed how much was lost and was investigating the scope of the incident. Reports said the halt covered the layer-1 network and rollups, with no restart date set.

Mangalaj said initial findings pointed to a previously unknown bug in MoveVM’s implementation on Cosmos SDK, which he described as a “Day 0” bug, and said it enabled unauthorized token minting. He added that the flaw did not apply to the native INIT token, distinguishing estimates of the value of assets minted and transferred from any claim that new INIT had been issued. According to D2 Finance’s account, cited by Cointelegraph, 2 million AUSD was minted without sufficient backing. The attacker then used cross-chain transfers to move about 1.4 million AUSD, 105 ETH and 1.08 million USDC to Ethereum. The reference to MoveVM remains an initial finding reported by the publication as coming from the co-founder; Initia has not publicly confirmed the precise cause of the exploit.

D2 Finance estimated that the assets consolidated in a wallet on Ethereum amounted to about 1,135.5 ETH, worth $2.73 million, according to coverage published on October 23. That wallet estimate is close to Mangalaj’s estimate of about $2.7 million for assets minted and transferred before the chain was halted, but it does not settle the amount of losses Initia will confirm. Spreek’s figure of about $2.6 million refers to what he said had been spent, while other funds remained in transit at the time of the report. The figures therefore describe different stages and assets in the incident, rather than a single final measure of losses. Initia said it was working with security teams, auditors and exchanges to verify the scope of the incident.

Initia supports a network of interconnected layer-2 networks known as Minitias, according to Cointelegraph. As a result, the halt covered the core network and its associated rollups, while cross-chain transfers were part of the reported path for moving assets. This provides context for the assets cited in incident estimates: AUSD, ETH and USDC, rather than the native INIT token, according to Mangalaj’s account of the initial findings. As context on the token’s history, Binance announced in April 2025 that INIT’s maximum supply was 1,000,000,000 tokens and that trading was scheduled to begin on April 24, 2025. That figure provides context on the token supply; it does not establish the amount of assets moved in the October incident.

INIT moved sharply after reports of the exploit on October 23. The Block said the token fell 14% immediately after the incident was reported, then reversed its losses and was up 14% on the day at the time of its update. Cointelegraph cited another price reading for the same period, saying INIT briefly fell to about $0.115 before rebounding above $0.15. The two accounts describe a volatile trading session on the day of the incident, using different measures: the daily percentage change and price levels. The price rebound does not determine the losses or the extent of the operational impact, which Initia said it was still investigating.

The impact of the halt on users and the timetable for restarting the network were unclear in coverage published on Friday, October 23. Initia said it would share verified information through its official channels and warned against unofficial links, messages and claims. Crypto Basic also reported that the team continued to assess the incident with security specialists, auditors and exchanges, while questions about its scope and impact remained open. The announcement cited in reports gave no date for resuming the network. Until findings become clear, the estimates of $2.6 million and $2.7 million remain attributed to Spreek and the co-founder, respectively, while Initia has not announced a confirmed loss total.