Hacker Prints $2.7M in Crypto as Initia Blockchain Grinds to a Halt
Key Takeaways
- Initia halted its L1 blockchain and connected rollups Friday after an exploit enabled a projected $2.7 million in unauthorized token minting.
- Co-founder Ezaan Mangalji linked the breach to a previously unknown MoveVM flaw, confirming native INIT tokens were unaffected.
- Agora denied any AUSD compromise, while Upbit suspended INIT transfers and the blockchain remained offline.
Initia Network Halted as Co-Founder Reveals an Estimated $2.7 Million Exploit
“As of Oct 23, 2026, 3:41:30 PM UTC, the Initia L1 and Rollups have been halted due to a security incident,” the official Initia X account wrote at 12 p.m. Eastern time on Friday. “Our team is actively investigating the situation and working to establish the full scope of any impact with security teams, validators, and exchanges.”
Initia is essentially a blockchain platform designed to make it easier for different cryptocurrency networks to work together. The system leverages several core pieces in combination, and the Initia layer one (L1) chain was built on the Cosmos SDK using CometBFT consensus. Because Initia’s blockchain coordinates its connected networks, a vulnerability affecting the main chain can have consequences beyond a single application.
In the aftermath of the disruption, Initia co-founder Ezaan Mangalji disclosed additional details about the incident. “To the best of our knowledge so far, this is a Day 0 bug related to Initia’s MoveVM on CosmosSDK that allowed the exploiter to mint additional tokens on the Initia L1 but does not apply to native INIT tokens,” Mangalji wrote on X.
The project’s co-founder added:
“The attacker was able to mint and bridge out ~$2.7m worth of AUSD, ETH, and USDC before the chain was paused.”
Agora Addresses AUSD Concerns as Initia Remains Offline
As of press time, at 7:45 p.m., roughly seven hours after the incident, the Initia chain is still halted and stuck at block height 23365925. Alongside Initia’s disclosure, Agora, the company behind the AUSD stablecoin, clarified that its own token contract was not compromised.
“We’re aware of today’s security incident on Initia. Agora has no smart contracts deployed on Initia. Our security team has been monitoring the situation and will freeze funds related to hacker addresses that hold AUSD on chains where AUSD/Agora smart contracts are deployed,” Agora wrote on X.
The team continued in a separate post:
“For additional clarity: AUSD and Agora are unaffected. AUSD does not exist on Initia. AUSD deployments on all networks and Agora operations continue as normal. AUSD is fully backed.”
The incident also prompted the South Korean cryptocurrency exchange Upbit to suspend INIT deposits and withdrawals. While INIT slipped following the initial news, Initia’s native crypto asset has rebounded and stands 12.5% higher over the last 24 hours. The crypto asset has done exceptionally well over the last 30 days, recording a 65.8% gain since Sept. 23.
As of the latest information provided by scan.initia.xyz, the L1 blockchain remains offline, the total financial damage has not been fully confirmed by the official X account, and developers have not announced when normal operations will resume.
