Initia is back online after more than nine days offline. In an early Monday announcement on X, the project confirmed that its layer-1 blockchain and rollups are processing transactions once again, stating that “the Initia L1 and rollups are now online and operational.” The restart ends a halt initiated on October 23 after attackers exploited a flaw in Initia's MoveVM, allowing them to withdraw about $2.7 million from the project. For users and applications built on the network, the resumption restores basic functionality after more than a week in which neither the layer-1 chain nor any of its connected rollups could process transactions.

Phased restoration of services

Initia did not re-enable all functionality at once. Cross-chain bridge and trading-platform transfers were set to resume at some point on Monday, November 2, with withdrawals completed according to preset schedules. Per reports, LayerZero OFT (Omnichain Fungible Token) assets, WETH (wrapped Ether) and AUSD0 have a 24-hour processing window, while Noble USDC withdrawals are subject to hourly limits — staggered controls that determine how quickly normal cross-chain throughput returns.

Initia has also pointed out that it has restored full backing for AUSD0, USDC.n and WETH. The team has continued to share recovery details in updates on X.

The restart followed a chain upgrade that applied an independently audited MoveVM patch, which added extra security measures and cut off forged balances still tied to the attacker from the network. Initia did not roll back the network, so existing on-chain history was preserved rather than rewritten even as the forged balances were severed.

A “Day 0” MoveVM flaw let the attacker mint tokens

Initia is a layer-1 network built on the Cosmos SDK that runs the Move virtual machine and hosts connected rollups. Move was originally developed for Meta's Diem project and is also used by networks such as Aptos and Sui, and Initia runs its own MoveVM implementation on top of the Cosmos SDK — the component the co-founder identified as the source of the bug. The project halted its layer-1 chain and every connected rollup at 15:41:30 UTC on October 23, following an alert first raised by on-chain analyst Spreek.

Co-founder Ezaan Mangalji blamed the breach on a previously unknown “Day 0 bug related to Initia’s MoveVM on CosmosSDK” that allowed the attackers to create additional, unbacked tokens on the L1. The losses stemmed from these unbacked token mints, with the native INIT token’s supply remaining unchanged throughout the episode.

The attacker minted 2 million unbacked AUSD tokens, then used cross-chain transfers to push roughly 1.4 million AUSD, 105 Ether and 1.08 million USDC to Ethereum. Cryptopolitan reported at the time that the funds stolen in the hack totaled around $2.73 million.

Initia Foundation covered the losses

The Initia Foundation approved funding to make up the difference on the funds drained from the bridge, at a 1:1 ratio of the unbacked assets moved off the chain — a step that placed the shortfall on the foundation rather than on users holding the affected bridge assets. Agora, the issuer of the AUSD stablecoin, helped contain the fallout by freezing addresses linked to the hacker, an example of the freeze capability stablecoin issuers retain over on-chain balances.

South Korean exchange Upbit suspended INIT deposits and withdrawals after the incident, keeping trading open. INIT dropped about 14% when the news broke, then recovered. By October 29, the token was reportedly up 53.21% over 24 hours at $0.272354, after spiking as high as $0.423 and pulling back. INIT was trading around $0.1585, down more than 11% over the last 24 hours as of this report. From here, the items to watch include whether the 24-hour withdrawal windows and Noble USDC hourly limits clear on schedule, and whether Upbit resumes INIT deposits and withdrawals.

Source: Cryptopolitan