Initia Has No Restart Date After Attacker Mints Tokens and Bridges Out $2.7 Million

Initia’s Chain Stays Offline After a $2.7 Million Token Mint‑and‑Bridge Attack

Initia’s layer‑1 blockchain and its associated rollups have been offline since the morning of Friday, October 23, 2026. The halt follows a security incident in which an attacker exploited a Day‑0 bug in Initia’s MoveVM, minting a large amount of synthetic assets and moving them out of the network through LayerZero adapters on Ethereum. As of the latest update, the team has not announced a restart date.

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What Went Wrong: The MoveVM Flaw

Co‑founder Zon identified the root cause as a “Day 0 bug” in Initia’s MoveVM implementation on the Cosmos SDK. The vulnerability allowed the attacker to create additional tokens on the Initia L1 without affecting the native INIT token. The exploit was flagged by a pseudonymous researcher, Spreek, at 11:27 a.m. ET—just 14 minutes before the chain was paused.

Key points:

• The bug was specific to the MoveVM, the virtual machine that executes smart contracts on Initia.
• It permitted the minting of unbacked AUSD, as well as synthetic ETH and USDC representations.
• The exploit was halted when the network was paused at 11:41 a.m. ET, but not before a substantial amount of value was moved.

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How the Funds Escaped: LayerZero Bridge Mechanics

D2 Finance traced the outflow of assets and found that the attacker used LayerZero’s OFT (Omnichain Fungible Token) adapters to bridge the newly minted tokens to Ethereum. The process worked as follows:

1. Minting – At 10:59 a.m. ET a transaction created roughly 2 million AUSD on Initia.
2. Burn & Bridge – The unbacked tokens were burned on Initia and sent through LayerZero to Ethereum.
3. Adapter Payout – On Ethereum, lockbox contracts holding the real collateral released the corresponding assets.

The breakdown of the outflow:

• 1.4 million AUSD (about 71 % of the AUSD adapter’s balance)
• 105 ETH (approximately 96 % of the native‑ETH adapter’s balance)
• 1.08 million USDC minted via Circle’s CCTP bridge

All of this value reached Ethereum in just over seven minutes, and the attacker’s address sold the AUSD on the 1inch aggregator within 84 seconds of receipt.

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AUSD’s Status: Backed but Unaffected on Initia

Agora, the issuer of AUSD, clarified that it has no smart contracts deployed on Initia and that the token does not exist natively on the chain. Their statements confirm that the AUSD moved out of Initia was a bridged representation backed by assets locked on Ethereum, not the original stablecoin.

• At 12:57 p.m. ET Agora noted it “has no smart contracts deployed on Initia.”
• At 2:26 p.m. ET they added that “AUSD does not exist on Initia” and reiterated that the stablecoin remains fully backed.

These remarks help reassure holders that the underlying AUSD reserves are intact, even though the bridged tokens were exploited.

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What’s Next for Users and Validators?

Initia’s team has pledged to work with security experts, validators, and exchanges to assess the full impact. However, they have not provided a concrete timeline for restoring the network or compensating affected users. In the meantime:

• Asset holders should monitor official Initia channels for updates and avoid interacting with any unofficial recovery schemes.
• Validators are advised to keep their nodes offline until a clear restart plan is announced.
• Exchanges that list INIT or bridged assets may need to pause trading to mitigate further risk.

The incident underscores the importance of rigorous audit processes for new virtual machine implementations, especially when they serve as the foundation for cross‑chain bridges.

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Bottom Line

Initia’s chain remains down after a MoveVM bug enabled an attacker to mint and bridge out roughly $2.7 million in synthetic assets via LayerZero. While the underlying AUSD reserves stay fully backed, the network’s future hinges on a thorough post‑mortem and a clear restart strategy. Users should stay tuned to official communications and exercise caution when dealing with any Initia‑related assets.