Transfer of assets worth about $2.7 million prompts Initia to halt its network for investigation
Key Facts
Initia halted its mainnet and affiliated rollup networks on October 23, 2026, at 15:41:30 UTC following a security incident. The company said it was investigating the scope of the incident with security teams, auditors and trading platforms. Initia has not confirmed the value of the losses or the precise cause of the incident. Its co-founder estimated that assets worth about $2.7 million were transferred through the bridge before the network was halted. That estimate puts the scale of the incident slightly above a separate preliminary estimate by researcher Spreek.
Spreek said the attacker cashed out about $2.6 million, noting in his preliminary estimate that other funds were still moving. The co-founder said the transferred assets included stablecoins and Ethereum, without confirming the final total loss. An analysis published by D2 Finance said the attacker minted 2 million units of AUSD without sufficient collateral. The analysis added that about 1.4 million units of the same token, 105 units of Ethereum and 1.08 million units of USDC were transferred to Ethereum. These details remain attributed to D2 Finance's analysis; Initia has not confirmed them as the final tally of the incident.
The co-founder said initial findings pointed to a flaw present from day one in the implementation of the Move Virtual Machine on the Cosmos SDK, which allowed tokens to be minted without authorization. He said the flaw did not apply to Initia's native token. According to D2 Finance, the assets were later consolidated in an Ethereum wallet containing about 1,135.5 units of Ethereum. The outlet estimated the balance was worth about $2.73 million at the time of its incident report. That figure differs from Spreek's estimate of the amount cashed out, as it reflects the value of assets in the wallet after consolidation.
The incident quickly affected trading in Initia's token, which fell about 14% immediately after the exploit was reported, according to coverage by The Block. The token then reversed its losses and was up about 14% on the day at the time of the report. Upbit suspended deposits and withdrawals of the token, while the coverage said trading continued. Kraken also temporarily suspended deposits and withdrawals because of an issue affecting the network, saying it was monitoring the situation and would keep users updated. Kraken recorded the service suspension at 16:15 UTC on October 23.
The coverage did not specify when the network would resume operations, and no date was announced for the resumption of token deposits and withdrawals on the platforms mentioned. Cross-network transfers are significant to Initia's design, which aims to connect a mainnet with application-specific chains. The co-founder said in a 2024 interview that moving assets between blockchains makes the user experience more complex. Initia's token began trading on Binance on April 24, 2025, with pairs against multiple currencies and assets. The next steps hinge on the investigation's findings and platform updates on suspended services.