Initia paused its blockchain on Friday after confirming a security incident that disrupted the network and led to the unauthorized creation of tokens on its layer-1 chain. Co-founder Ezaan Mangalji said the attacker exploited what the team believes is a Day 0 bug tied to Initia’s MoveVM on CosmosSDK.
According to Mangalji, the exploiter minted and bridged out about $2.7 million in AUSD, ETH and USDC before the chain was halted. He added that, based on what the team knew at the time, the issue affected tokens on the Initia L1 but did not apply to the network’s native INIT token.
Exploit forced an immediate network halt
Initia said it halted the network after identifying the breach, effectively stopping chain activity while the team investigated. Mangalji described the flaw as a Day 0 bug and said it enabled the attacker to mint additional tokens directly on Initia’s main chain.
The co-founder’s public update framed the estimate at roughly $2.7 million and specified that the attacker was able to bridge the assets out before the shutdown. The disclosed assets were AUSD, ETH and USDC.
Chain remained offline hours later
At the time of the report, the blockchain had remained down for about seven hours following the incident. The halted network was reported as stuck at block height 23365925, with no confirmed timeline for resuming normal operations.
Initia had not fully confirmed the final financial impact through its official X account, and developers had not announced when the layer-1 chain would come back online. That left the scale of the damage and the recovery schedule still uncertain.
Agora says AUSD systems were not compromised
The incident prompted questions around AUSD, one of the assets named in the exploit. Agora, the company behind the stablecoin, said its own infrastructure was not breached and stated that it has no smart contracts deployed on Initia.
Agora added that its security team was monitoring the event and would freeze funds tied to hacker addresses on chains where AUSD or Agora smart contracts are actually deployed. In a separate clarification, the company said AUSD does not exist on Initia, that its other deployments and operations were continuing normally, and that the stablecoin remained fully backed.
Exchange response and market reaction
The disruption also led South Korean exchange Upbit to suspend deposits and withdrawals for INIT. That move followed Initia’s disclosure of the exploit and reflected the operational uncertainty around the halted chain.
INIT initially fell after news of the incident, according to the report, but later recovered. By the latest update cited, the token was up 12.5% over the previous 24 hours and had gained 65.8% over the prior 30 days since Sept. 23.
What is confirmed next
For now, the confirmed next step is continued investigation while the network remains paused. Initia’s team has publicly identified the suspected source of the issue, but it has not yet provided a restart time or a final accounting of losses.
Until developers announce a recovery plan and restart the chain, the main verified facts are that the blockchain is halted, the exploit is believed to have involved a MoveVM-on-CosmosSDK bug, and approximately $2.7 million in minted assets were bridged out before the pause.
Source: news.bitcoin.com