Initia halts Layer 1 and rollups after unauthorized mint exploit bridges out about $2.7 million

Initia halted its Layer 1 blockchain and all of its rollups at 15:41 UTC on October 23, 2026 after an attacker exploited a previously unknown bug in its MoveVM implementation on Cosmos SDK to mint tokens without authorization. Co-founder Ezaan Mangalji, who goes by Zon, said preliminary findings pointed to a "Day 0" bug that allowed unauthorized minting and that the bug does not apply to native INIT tokens. Researcher Spreek first flagged the exploit, initially estimating about $2.6 million cashed out with more funds in transit.

D2 Finance traced the mint to 2 million unbacked AUSD, with about 1.4 million AUSD, 105 ETH and 1.08 million USDC bridged to Ethereum and consolidated into a wallet holding about 1,135.5 ETH, worth about $2.73 million. Mangalji put the total bridged out at about $2.7 million worth of AUSD, ETH and USDC before the chain was paused. Initia says it is investigating with security teams, validators and exchanges and has not itself confirmed the loss total, so the figures above are the co-founder statement and researcher tracing as reported, not a company confirmed total.

Sources: The Block; Cointelegraph