Initia has halted its layer-1 blockchain and rollups after security researcher Spreek reported unauthorized token minting and approximately $2.6 million cashed out by an attacker.
Summary
- Initia suspended its layer-1 network and rollups at 3:41:30 p.m. UTC on Oct. 23.
- Spreek estimated $2.6 million had been cashed out, with more funds still moving.
- The Defiant reported a later transfer of 1,135.5 ETH linked to the incident.
- Agora disputed the AUSD minting account, saying it has no smart contracts on Initia.
Initia confirmed in its Oct. 23 statement that the suspension took effect at 3:41:30 p.m. UTC, with security teams, validators, and exchanges helping investigate the incident. The announcement identified a security incident but did not establish the amount lost or describe the underlying vulnerability.
Initia confirms a network halt while investigators assess the damage
The network team said it was working to establish the full scope of the impact, without listing affected applications, individual user losses or a schedule for restarting operations in the statement.
“We will share verified information through our official channels as it becomes available.”
Initia urged users to remain cautious about unofficial links, messages and claims circulating during the investigation. Its warning accompanied the announcement that both the base blockchain and its rollups had stopped.
Spreek’s separate post described tokens being minted without authorization and put the amount already cashed out at $2.6 million. The researcher cautioned that more funds were still in flight when the post was published, leaving that figure as an early estimate.
The two posts provided different parts of the initial account. Initia acknowledged the operational suspension, while the researcher supplied the estimate of assets moved and the allegation of unauthorized minting.
Reported Ethereum transfers include AUSD and a later ETH consolidation
The Defiant reported that Ethereum records showed stablecoin swaps followed by a transfer of 1,135.5 ETH. Its account cited Spreek’s $2.6 million estimate, without presenting the ETH transfer as a separate theft to be added to that amount.
An earlier analysis attributed to D2 Finance described the creation of 2 million unbacked AUSD tokens and withdrawals involving 1.4 million AUSD, 105 ETH and 1.08 million USDC to Ethereum. Those figures remain the platform’s account of the transactions; a complete independent reconciliation was not available for this draft.
A subsequent report by The Defiant said 1.4 million AUSD left a bridge adapter. Agora said the incident involved a third-party product using AUSD and that it had no smart contracts deployed on Initia.
Agora’s account disputes the earlier description of its stablecoin being minted on the network. The precise relationship between the allegedly created tokens, the bridge transfers, and the assets received on Ethereum still requires confirmation from the project’s technical investigation.
The monetary figures circulating in the initial accounts describe different observations during the incident. They have not been established as a final, reconciled total of losses, and the available network statement did not identify how much belonged to individual users.
Initia’s earlier development centered on connected appchains
Initia’s architecture was developed around a base blockchain and application-specific rollups. In February 2024, crypto.news previously reported that the startup had raised $7.5 million in seed financing co-led by Delphi Ventures and Hack VC.
Initia said at the time that the money would support work on its testnet, which was scheduled for the first quarter of 2024. Nascent and Figment Capital participated in the financing alongside the lead investors.
The company described its project as a network for interwoven rollups. Its early funding announcement concerned development and testing, preceding the current incident by more than two years.
By July 2024, LayerZero Labs and Initia Labs had announced plans to develop an interoperability standard for Cosmos. The proposed connection covered Cosmos SDK chains and blockchains already enabled for LayerZero messaging.
LayerZero described the implementation as a Cosmos SDK module, with support intended for chains using virtual machines and those without them. The announced standard would let developers connect applications on Cosmos with applications on other supported networks.
Echelon previously selected Initia’s stack for a Move appchain
In November 2024, lending protocol Echelon announced a Move appchain built on Initia’s Interwoven Stack and Celestia’s modular blockchain technology. Echelon described the chain as designed for debt management and modular assets.
The announcement listed LayerZero onboarding, access to Celestia-native assets, native USDC, and enshrined oracles among the planned integrations. Echelon said the appchain would support atomic cross-chain composability with Initia’s layer-1 network and a native liquidity hub.
Echelon’s roadmap at the time reported more than $100 million in total value locked and $132 million in borrowed assets. Its public testnet was scheduled for later in 2024, with the mainnet launch aligned with Initia’s rollout.
