Initia Suffers $2.73 Million Loss Due to Token Issuance Bug
Written with artificial intelligence.
Initia has reported a bug related to its MoveVM that led to the unauthorized issuance of tokens, resulting in a loss of approximately $2.73 million from its bridge reserves. The nominal value of the issued tokens was estimated at around $7.48 million, highlighting a significant discrepancy between nominal and actual asset outflows.
Bug Leads to Token Over-Issuance
Initia, a project utilizing the MoveVM, experienced a bug that permitted the issuance of additional tokens, leading to an outflow of around $2.73 million (approximately 3.62 billion KRW) from its bridge reserves. The nominal value of these tokens was reported to be about $7.48 million (around 9.91 billion KRW), indicating a significant difference between the nominal value and the actual assets disbursed from the bridge.
Initial Findings
John Zon, co-founder of Initia, explained that the bug, identified as a 'Day 0' issue within the Cosmos SDK-based MoveVM, allowed for the unauthorized token issuance on Initia's layer 1 (L1). Zon clarified that this bug does not affect the base token, INIT. This explanation is based on preliminary investigations, and a comprehensive technical analysis has yet to be released.
Asset Tracking and Response
Blockchain analytics firm Bitquery estimated that the nominal value of the tokens issued by the attacker was around $7.48 million, while actual assets disbursed from the bridge amounted to approximately $2.73 million. They tracked the outflowing assets to AUSD, USDC, and ETH, which collectively amounted to 1,135.5 ETH on the Ethereum network. As of 3:52 AM on the 24th, the associated wallet had not moved any funds.
In response to the security incident, Initia halted operations on both L1 and its rollup as of 12:41:30 AM on the same day. The project is currently collaborating with security firms, validators, and exchanges to assess the impact of the incident and plans to communicate verified information through official channels. Additionally, Upbit has temporarily suspended deposits and withdrawals of INIT as a user protection measure.
This report is based on market data and chart analysis and does not constitute investment advice.