The Initia blockchain, a Layer‑1 protocol backed by Binance Labs, Delphi Ventures and HackVC, was halted on Tuesday after a second security breach in less than three weeks resulted in at least $615,000 being siphoned from escrow accounts, according to a post on the Initia X channel.

Details of the latest breach

The team said an attacker compromised rollup infrastructure keys, enabling the creation of unauthorized IBC (Inter‑Blockchain Communication) transfers that moved assets out of escrow. While the stolen funds were taken off‑chain, the post noted that most of the assets remain on the Initia network, suggesting a possible recovery through coordinated validator action.

Previous incident and cumulative impact

Only eight days earlier, Initia suffered a separate exploit in which a script‑caching bug allowed an attacker to spoof the MoveVM state and mint unbacked WETH, iUSD and USDC tokens. That attack resulted in $2.7 million in losses bridged to Ethereum, prompting a chain halt that lasted until November 2, according to Protos.

Combined, the two incidents have cost the project more than $3.3 million—an amount that now exceeds the protocol’s remaining total value locked (TVL). The TVL has contracted by over 90% from its peak after the May 2025 launch.

Community reaction and market response

The latest hack sparked a wave of criticism from users, many calling for the chain to be shut down and accusing the team of negligence or an “inside job.” Despite the turmoil, the native INIT token rose roughly 60% in the 24‑hour period following the announcement, fueling speculation of a “crime pump” among frustrated participants.

What to watch next

Observers will be monitoring whether Initia’s validators can successfully retrieve the remaining escrowed assets, and if the project will implement additional security measures or seek external audits. The broader market will also watch for any regulatory scrutiny that may arise from repeated high‑value exploits on a Binance‑backed Layer‑1 platform.