Initia has halted its layer-1 blockchain and associated rollups after on-chain investigators reported an exploit that enabled an attacker to mint tokens without authorization and drain more than $2.6 million in crypto assets.

A full network halt of this kind suspends block production and freezes all on-chain activity — transactions, withdrawals and application interactions — across both the base chain and its rollups until validators bring the network back online. The network was shut down at 3:41 p.m. UTC on Friday following the security incident, Initia said in a post on X. The team added that it was working with security researchers, validators and exchanges to determine the full extent of the impact.

Blockchain security researcher Spreek was the first to flag the exploit on Friday, reporting that an attacker had minted tokens without authorization and converted approximately $2.6 million into other assets, with additional funds still being moved at the time.

DeFi platform D2 Finance later reported that the attacker leveraged a vulnerability to mint 2 million AUSD tokens without sufficient backing. According to the firm, the attacker then used cross-chain transfers to withdraw approximately 1.4 million AUSD, 105 Ether (ETH) and 1.08 million USDC (USDC) to Ethereum. The stolen assets were subsequently consolidated into an Ethereum wallet holding approximately 1,135.5 ETH, worth about $2.73 million.

D2 Finance attributed the exploit to a vulnerability in a Move function that allowed the attacker to create unbacked tokens and exchange them for assets on Ethereum. Move is a smart contract programming language originally developed for Meta's Diem project and since adopted by layer-1 networks such as Aptos and Sui, which models digital assets as linear resources that cannot be copied or accidentally destroyed.

Initia is a layer-1 blockchain designed to support a network of interconnected rollups known as Minitias, meaning the shutdown pauses activity across the broader ecosystem rather than a single application. Its native token, INIT, briefly fell to around $0.115 on Friday before rebounding above $0.15, according to CoinGecko data. At the time of writing, the token was trading near $0.1496, up roughly 14% over the previous 24 hours.

Initia has not publicly confirmed the estimated losses or the precise cause of the exploit, and the extent of the impact on users as well as the timeline for restoring network operations remain unclear. How the team coordinates a restart with validators, whether exchanges can freeze or trace the consolidated funds, and whether the root cause lies in the reported Move function or elsewhere are among the open questions as the investigation continues. Cointelegraph was unable to reach Initia for additional comment through its official X account.