Initia, a blockchain that supports interconnected optimistic rollups, announced a temporary shutdown of its layer‑1 network on Nov 10 at 06:18 UTC. The pause follows the discovery of unauthorized transfers from escrow accounts that hold assets bridged to several rollups. According to the project’s team, the attacker exploited compromised rollup infrastructure keys to fabricate Inter‑Blockchain Communication (IBC) transfers, moving approximately $605,000 in USDC and $10,000 in other tokens to the Noble chain before validators halted block production.

Scope of the exploit and investigation

Initia’s initial statement cited roughly $615,000 in outflows, while blockchain‑security firm CertiK identified about $636,000 across 16 successful IBC transfers. The discrepancy reflects the early stage of the investigation, and the project has not confirmed a final loss figure. The compromised keys allowed the attacker to bypass normal escrow controls, but the team has not disclosed how the credentials were obtained or which rollup operators were affected. Most of the assets that left the escrow accounts remain on the halted L1, and the project is working with validators, security specialists, and exchanges to assess recoverability.

Background: October breach and remediation

This is the second network halt in less than three weeks. On Oct 23, an exploit of Initia’s MoveVM script‑caching system enabled an attacker to create unbacked balances of WETH, iUSD and USDC, resulting in about $2.7 million being bridged out via LayerZero and Noble. The stolen assets were later converted into roughly 1,135 ETH. Initia responded by funding a restoration of the affected assets, approving up to 1.08 million USDC, 105 ETH, and 1.4 million AUSD0, and resumed operations on Nov 2 after deploying an audited MoveVM patch and isolating forged balances.

Market reaction

Despite the operational shutdown, Initia’s native token INIT experienced a sharp rally. CoinGecko data showed the token trading near $0.2057, up 61.31% in the previous 24 hours, with a 24‑hour trading volume of about $84.81 million and a market cap near $46.37 million. The price surge moved INIT from roughly $0.12 to above $0.23, reflecting heightened speculative activity even as the network remains paused.

What to watch next

Key developments to monitor include: (1) the release of a detailed forensic report from Initia and CertiK clarifying the full extent of the escrow loss and the identity of the compromised rollup keys; (2) any announcement regarding the resumption of block production and the security measures being implemented to prevent a repeat of the October and November attacks; and (3) potential reimbursement plans for affected users, which could influence future price movements of INIT.