Modular blockchain platform Initia halted its Layer 1 network and connected rollups on Friday after confirming a security incident that compromised operations. Co-founder Ezaan Mangalji disclosed that the exploit enabled an attacker to mint an estimated $2.7 million worth of tokens before the chain was paused.
The official Initia account announced the halt at 12 p.m. Eastern time, stating: "The Initia L1 and Rollups have been halted due to a security incident. Our team is actively investigating the situation and working to establish the full scope of any impact with security teams, validators, and exchanges."
Details of the Exploit
Mangalji attributed the breach to a previously unknown flaw in Initia's MoveVM on CosmosSDK. He confirmed that native INIT tokens were unaffected by the vulnerability.
According to Mangalji, the attacker minted and bridged out approximately $2.7 million worth of AUSD, ETH, and USDC before the chain was paused. The blockchain remained halted at block height 23365925 as of seven hours after the incident was disclosed.
Stablecoin and Exchange Response
Agora, the company behind the AUSD stablecoin, clarified that its smart contracts were not deployed on Initia and were therefore unaffected. The company stated: "AUSD does not exist on Initia. AUSD deployments on all networks and Agora operations continue as normal. AUSD is fully backed."
South Korean cryptocurrency exchange Upbit suspended INIT deposits and withdrawals in response to the incident. Despite initial price pressure from the news, INIT rebounded and recorded a 12.5% gain over the following 24 hours.
Network Status
As of the latest information, the Initia L1 blockchain remained offline. Developers had not announced when normal operations would resume, and the full financial scope of the damage had not been officially confirmed.
