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Magyar25 Oct 2026
On-chain data firm Bitquery says the October 23 Initia exploit pushed the Noble-held USDC reserve backing Initia's USDC from about $1 million to an intraday low of $63, causing dozens of ordinary withdrawals to fail. Initia's chain remains halted while a fix for a MoveVM bug is audited, with no restart date or reimbursement plan announced yet.
New on-chain analysis shows how deep the damage from last week’s Initia exploit went for ordinary users. According to a CryptoSlate report citing Bitquery’s investigation, the reserve that backs USDC on Initia was almost completely emptied before the network was halted, so regular users trying to cash out simply could not.
From $1 million to $63
USDC on Initia is a bridged representation backed by real USDC held on the Noble blockchain. Bitquery found that this reserve fell from about $1 million before the attacker’s cash-outs to an intraday low of just $63 at 15:37 UTC on October 23. A later check at 18:52 UTC that day showed roughly $24,000.
Bitquery counted 55 failed ordinary USDC withdrawal attempts before the halt, most of them from a single bot repeatedly submitting the same balance. Even some of the attacker’s own larger withdrawal requests failed once the reserve ran dry.
Initia said its layer-1 and rollups halted at 15:41:30 UTC on October 23. Co-founder Zonny initially estimated that about $3 million had been bridged out before the pause. Bitquery’s estimate is similar, about $3 million in real assets paid from bridge reserves, separate from the roughly $7 million face value it assigned to the unauthorized balances.
What caused it
In an October 24 update, Initia attributed the exploit to a MoveVM script-caching bug that bypassed security checks. The project said the attacker created unbacked WETH, iUSD and USDC balances without changing their total supplies, and that no native INIT was minted.
Because those balances had no matching deposits behind them, the attacker could claim real assets from bridge reserves. That is why the reserve drained and legitimate holders were left with tokens they could not redeem.
Stablecoin issuer Agora also clarified that its AUSD contract was not deployed on Initia and no AUSD was minted there. The affected exposure was a separate third-party product using AUSD on Ethereum that Agora did not operate.
Is USDC itself at risk?
No evidence points that way. Circle distinguishes native USDC, which it issues and redeems for dollars, from bridged versions backed by USDC locked on another chain. An emptied bridge reserve blocks exits for that specific bridged token, but it does not show any failure of Circle’s own backing.
Where things stand
At 08:46 UTC on October 24, Initia said the L1 and rollups remained halted and that it expected a fix to be completed and audited within days, with asset recovery ongoing. It did not give a firm restart date or reimbursement terms, so how the missing bridge backing will be restored is still unresolved.
What it means for traders
- Bridged is not native. A stablecoin is only as redeemable as the bridge reserve behind it on that chain. Check whether you hold native or bridged USDC.
- Exit liquidity can vanish fast. The reserve went from about $1 million to $63 within hours, before the chain was even halted.
- Watch for the restart and reimbursement plan. INIT and Initia-based assets may stay volatile until terms are published.
- Keep trading funds on audited venues. See our exchange comparison and how we test exchanges; our top picks are BingX and OKX.
This article is for information only and is not financial advice.
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