Taiko halts its Ethereum layer 2 network after a bridge exploit, token dives 10%

2 min readMake preferred on ShareShare this articleCopy linkX iconX (Twitter)LinkedInFacebookEmailMake preferred on SummaryShowTaiko, an Ethereum Layer 2 network, halted block production and urged users to withdraw funds after an attacker exploited its bridge to steal about $1.7 million.The attacker forged cross-chain proofs so that fake withdrawal requests were accepted on Ethereum without matching deposits on Taiko, draining the bridge and its token vault before the team froze activity.While the dollar loss was relatively small, the exploit used the same cross-chain messaging flaw behind more than $340 million in bridge hacks this year, and Taiko said it will release a full incident report on Monday in Asian hours.Taiko, an Ethereum Layer 2 network that processes transactions off the main chain and settles them back to it, halted block production and told users to pull their funds after an attacker exploited its bridge earlier Monday. The team estimated losses at about $1.7 million before it stopped the outflows. The attacker forged the proofs a bridge uses to confirm that a withdrawal matches a real deposit. Fake withdrawal requests were accepted on Ethereum without any matching transaction on Taiko's own chain, which let the attacker register fraudulent withdrawals and drain funds from the bridge and its token vault, Taiko said. Bridges are a blockchain-based tool that moves assets between Taiko and Ethereum. How the attacker forged valid-looking proofs points to a leaked key. Security firm BlockSec said its initial investigation traces the likely cause to a signing key for Raiko, the system Taiko uses to produce the proofs that convince Ethereum its transactions are genuine, being left publicly accessible on GitHub. That key is meant to stay sealed inside secure hardware so the proofs can be trusted. With it exposed, the attacker could enroll their own provers as legitimate and sign fraudulent proofs that Taiko's verifier accepted, then fake a bridge withdrawal that released real assets on Ethereum. .@taikoxyz was reportedly attacked, with losses exceeding $1.7M. Our initial investigation suggests the likely root cause was an exposed Raiko SGX enclave signing key on GitHub. Raiko is Taiko’s multi-prover stack for Taiko and Ethereum blocks, so an exposed Raiko SGX enclave key… https://t.co/8BIiEeNtYJ pic.twitter.com/eAq9Xjngz8 Taiko urged all users to withdraw from every bridge on the network, asked centralized exchanges to suspend deposits of its TAIKO token, and had its block producers stop making new blocks during the investigation. By about 2 a.m. ET it said the exploit was contained and withdrawals through the main bridge and token vault were fully stopped. The exploiter had already moved about 2 million TAIKO, worth roughly $170,000, to an account on the MEXC exchange. The dollar loss is small, but the flaw came from the same DeFi mechanism that have caused hundreds of millions worth of losses this year. Forged cross-chain messages drained $292 million from Kelp DAO's bridge in April and $11.4 million from the Verus-Ethereum bridge in May, the same failure where one chain is tricked into trusting a fake instruction from another. Bridges have produced more than $340 million in losses across at least 14 exploits in 2026, making it the costliest target in crypto. Taiko's damage stayed contained mainly because the team caught and froze it within hours. Taiko, which launched on Ethereum in May 2024, said it is preparing a full breakdown of the incident in Asian morning hours Monday. Related AssetsBitcoin$64,001.760.22%Latest Crypto News 1Bitcoin price may be headed to $54,000, says analyst who forecast October's all-time high21 minutes ago2Live markets: Bitcoin is stuck near $64,000 as ETF outflows reach a sixth week2 hours ago3Bitcoin developers want to fix the 'replace this transaction with a higher fee' button. Here's why3 hours ago4Ethereum validators asked to fund projects with up to 10% of staking rewards under new proposal3 hours ago5XRP briefly loses $1.14 support before buyers drive sharp rebound4 hours ago6Bitcoin holds near $64,000 as US-Iran talks progress but crypto sits out the rally4 hours ago7Are perps swaps? A quick look at that CME suit: State of Crypto 15 hours ago8Ethereum's biggest 'sandwich' bot drained of $7.5 million in ironic exploitJun 21, 20269Bitcoin holds near $64,000 as a renewed Hormuz threat clouds US-Iran ceasefire talksJun 21, 202610AI is making crypto security cheaper, faster and harder to ignoreJun 20, 2026Latest Research CEX Volumes Drop to Lowest Since September 2024 as RWA Perps Hit Record HighCEX Volumes Drop to Lowest Since September 2024 as RWA Perps Hit Record HighIn May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high. In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual future

Taiko halts its Ethereum layer 2 network after a bridge exploit, token dives 10%

Key takeaways

Also covered by

Taiko halts its Ethereum layer 2 network after a bridge exploit, token dives 10%

Key takeaways

Also covered by

More in business