Initia Halts Its Chain After a Bridge Drain

gm, Defiers!

These are the biggest stories in DeFi and crypto:

• Initia halted its chain after a reported mint exploit
• Swell paused swETH and rswETH withdrawals
• CoinDCX admits deposit losses; Tether froze $2.2M
• Arbitrum DAO weighs reopening Stylus activations
• Argentina: judge drops the LIBRA case against Milei

Today Initia halted its Layer 1 and its rollups after an attacker drained a bridge, according to onchain analyst Spreek. Initia's base chain handles bridging for a network of rollups. Spreek says the attacker created unbacked bridge tokens and sent them back through the bridge to empty its Ethereum side. Less than an hour after the halt, Agora froze the attacker's AUSD account on Ethereum. Yesterday Tether blacklisted wallets tied to $16 million in CoinDCX outflows. Swell also paused deposits and withdrawals after a key leak. Four teams used four different controls in two days.

Initia’s chain halt stopped transfers, bridge settlement and trading on the L1 and its rollups. It could not reach Ethereum. Five seconds after the halt, the attacker's Ethereum address sent 1,135.5 ETH to another wallet. Initia has not confirmed a loss total or given a restart time.

Tether caught more money, but much later. CoinDCX first denied a new breach, then said a failed process for moving deposits out of old addresses caused losses it absorbed. Tether's blacklist took effect about 31 hours after those wallets drained. AMLBot, a blockchain tracing firm, puts the frozen sum at about $2.2 million. Tronscan records confirm 1.385 million USDT frozen in three of the wallets.

On Tuesday we wrote that this year's frozen money was held by protocols and chains, and that issuer blacklists recovered nothing in 60 exploits. This week followed that pattern. The one issuer freeze that caught money came a day and a half late. The fastest tool was Initia's own halt, and it stopped at the edge of its chain. Swell's pause is the fourth control. It blocks every withdrawal, including honest ones, until Swell restores the correct exchange rate for its tokens.

Read more below!

As of 21:53 UTC, Oct. 23. Data: CoinGecko, Aave, Hyperliquid. Full list

HACKS

Initia Halts L1 and Rollups After Reported Mint Exploit

Initia halted its Layer 1 and rollups at 11:41 a.m. ET after onchain analyst Spreek reported an infinite-mint exploit. Spreek says the attacker created unbacked bridge tokens and sent them back through a bridge, cashing out about $2.6 million. Initia has not confirmed the loss or the mechanism. Agora says its AUSD contract is not on Initia and that a third-party product using AUSD on Ethereum was hit. The halt stops transfers, bridging and trading for INIT holders, with no restart time given.

Initia Halts L1 and Rollups After Reported Mint Exploit

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HACKS

Swell Pauses swETH and rswETH Deposits and Withdrawals

Swell paused deposits and withdrawals for swETH and rswETH after reports that its repricing keys were abused. The pause blocks new withdrawal requests and final ETH claims alike. Swell says it must restore the correct net asset value before it reopens, and that “All funds are safe.” Its app still shows about 1.203 ETH per swETH. The contracts show the bot role paused, with no revocation recorded. Withdrawals pay the lower of the rate at request and the rate at processing, so the displayed rate may not be the payout.

HACKS

CoinDCX Acknowledges Deposit Losses After Denying New Breach

CoinDCX acknowledged losses from a failed deposit-collection process, hours after its co-founder denied any new breach. Users kept sending crypto to addresses compromised in July 2025, and for a period the exchange stopped moving those deposits to safe wallets. CoinDCX says it absorbed the losses and credited users, but it gave no amount. ZachXBT says $15.8 million in deposits went unaccounted for. Tether then froze about $2.2 million in wallets downstream of the outflows, by AMLBot's count.

BLOCKCHAINS

Arbitrum Proposal Would Reopen Stylus Activations With Foundation Sign-Off

ArbitrumDAO is weighing a proposal to reopen Stylus contract activations on Arbitrum One, which the Security Council paused on Oct. 2. New Rust-based code would need a pass from an Arbitrum auditor and a signature from a Foundation-controlled multisig, with no fixed turnaround. Contracts that are already active stay callable by anyone. The DAO would remain the sole admin and could revoke the Foundation's signing role in a later vote. A Snapshot check comes before the onchain vote.

REGULATION

Argentine Judge Dismisses LIBRA Criminal Case Against Milei and 10 Others

An Argentine judge dismissed the LIBRA criminal case against President Javier Milei and 10 others, ruling that the conduct was not a crime. Milei promoted the Solana token on X in February 2025, and its price surged and then collapsed. The judge found no legally relevant deception and no official act tied to the project. The ruling also covers Karina Milei and Hayden Davis. A U.S. judge dismissed the investor class action in September. The ruling orders no payout to investors.

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