Initia halts its blockchain after exploit mints unbacked tokens and drains about $2.6M

23 Oct 2026

23 Oct 2026, 21:04 UTC+02:00

Initia, a layer-1 blockchain built around a network of connected rollups, halted its chain on Friday after security researchers flagged an exploit that let an attacker mint tokens without authorization. According to Cointelegraph, more than $2.6 million in crypto was converted and moved off the network before the halt.

What happened

Initia said in a post on X that the network was halted at 3:41 p.m. UTC on Friday following a security incident. The team said it was working with security researchers, validators and exchanges to understand the full impact.

Security researcher Spreek was the first to flag the problem, reporting that the attacker had minted tokens without authorization and converted roughly $2.6 million into other assets, with more funds still moving at the time.

How the attacker moved the funds

DeFi platform D2 Finance later reported that the attacker abused a vulnerability to mint 2 million AUSD tokens without sufficient backing. Using cross-chain transfers, the attacker then withdrew about 1.4 million AUSD, 105 Ether (ETH) and 1.08 million USDC to Ethereum.

D2 Finance said the stolen assets were consolidated into one Ethereum wallet holding about 1,135.5 ETH, worth around $2.73 million. The firm attributed the exploit to a flaw in a Move function that allowed unbacked tokens to be created and swapped for assets on Ethereum.

INIT price reaction

Initia’s native token, INIT, briefly fell to around $0.115 on Friday before rebounding above $0.15, based on CoinGecko data cited in the report. It was trading near $0.1496 at the time of writing, roughly 14% higher over 24 hours.

Initia has not publicly confirmed the estimated losses or the precise cause. How much users were affected and when the network will restart are still unclear.

What it means for traders

• Chain halts freeze your options. While a network is paused, deposits and withdrawals of its assets usually stop on exchanges too. If you hold INIT or assets on Initia rollups, expect delays until the team and exchanges confirm a restart.
• Unbacked stablecoin mints are a red flag. The attacker created AUSD with no real backing and swapped it for ETH and USDC. If you hold a smaller or chain-specific stablecoin, watch its peg and official updates closely after an incident like this.
• Volatility cuts both ways. INIT swung sharply in a single day. Thin liquidity after a hack can trigger fast moves, so use smaller size and stop losses if you trade the token.
• Custody and incident response matter. Exchanges handle halts and suspicious deposits differently. We weigh this in our testing method, and you can compare platforms like BingX, OKX and Kraken in our exchange comparison.

Related reviews

• Bingx review
• Okx review
• Kraken review

Sources

• Cointelegraph: Initia halts blockchain after exploit reportedly drains over $2.6M

News is for information only and is not financial advice. More crypto news