Initia Exploit Drains USDC Bridge Reserve to $63

AI Market Summary

An attacker drained the USDC bridge reserve backing tokens on Initia, halting the L1 and rollups while roughly $3M in real assets paid out against about $7M of unbacked balances. The MoveVM script-caching bug leaves withdrawals frozen with no restart or reimbursement plan, underscoring bridge and third-party reserve risk. Contagion appears contained, since Circle native USDC backing is unaffected, so broader market reaction should stay limited to affected DeFi and bridge counterparties.

Impact level

● Low

Affected assets

BTC/USDT+0.16%

AI Insight · BTC/USDTAI Insight

▼ Bearish

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An attacker drained the USDC bridge reserve on Initia during an October 23 exploit. Bitquery data shows the Noble held backing fell from about $1 million to $63 intraday on October 23, after 55 failed withdrawal attempts. Initia halted its L1 and rollups at 1541 UTC, citing a MoveVM script caching bug. About $3 million in real assets left through bridges against $7 million in unbacked balances.

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