Initia Layer-1 Halted After $2.7M Exploit on MoveVM

Initia halts network after $2.7M unauthorized minting

Initia, a Layer-1 blockchain and hub for connected rollups, has paused block production after a security incident in which an attacker minted roughly $2.7 million in tokens and withdrew them to other networks. The project’s team says the native INIT token was not impacted by the exploit, but a timeline for restoring network activity has not been announced.

Zero-day in MoveVM on Cosmos SDK

Co‑founder Izan Mangalgji identified the root cause as a zero-day vulnerability in the project’s MoveVM implementation running on the Cosmos SDK. The flaw reportedly allowed the attacker to create new tokens on Initia’s Layer-1, enabling unauthorized minting of AUSD, Ethereum and USDC equivalents before the chain was stopped. At the time of reporting, the main chain remained halted at block 23365925.

Impact on stablecoin issuer and exchanges

Agora, issuer of the AUSD stablecoin, clarified that its AUSD smart contract is not deployed on Initia and that AUSD operations were not compromised. Agora added it will freeze assets linked to attacker addresses on networks where AUSD contracts are active. South Korea’s crypto exchange Upbit has suspended INIT deposits and withdrawals while the investigation continues.

What this means for crypto security and users

The incident underscores ongoing smart contract security risks and the importance of robust MoveVM and Cosmos SDK auditing. Although INIT’s native supply appears unaffected, cross-chain rollups and token bridges remain vulnerable to exploits that enable illicit token minting and unauthorized transfers. INIT’s price initially fell but recovered, gaining about 12.5% over 24 hours as of the latest update, while the final loss assessment and restart plan remain pending.

Developers and token holders should monitor official Initia and Agora channels for recovery steps, forensic findings, and any proposed mitigations to strengthen blockchain security and prevent future smart contract vulnerabilities.