Key Takeaways:
- Taiko lost $1.7M after its chain verification mechanism was compromised
- The team halted block production and urged users to withdraw bridge funds
- Attacker moved 1.99M TAIKO to MEXC while holding 870.8 ETH
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Taiko loses $1.7M in bridge exploit, halts block production
Ethereum layer-2 scaling project Taiko lost roughly $1.7 million after an attacker compromised its chain-state verification mechanism, forcing the network to halt block production and prompting an urgent call for users to withdraw bridge funds.
"The security assumptions of all bridges deployed on Taiko can no longer be trusted," the team said in a post on X. Taiko confirmed it is working with its Security Council and ecosystem partners to contain the incident and may pursue technical and legal action against the attacker.
Blockchain security firm PeckShield estimated total losses at approximately $1.7 million, higher than Blockaid's earlier assessment of more than $1 million. Blockaid's preliminary analysis identified the root cause as a flaw in the source-signal proof verification mechanism used by Taiko's bridge, suggesting the attacker forged or manipulated proof data to bypass validation checks and drain assets from the ERC20 Vault on Ethereum.
On-chain data shared by Lookonchain shows the attacker has begun cashing out. The wallet moved 1.99 million TAIKO tokens, worth about $189,000, to the MEXC exchange. The same address still holds 870.8 ETH valued at nearly $1.52 million. Taiko shared four attacker wallet addresses and asked centralized exchanges to suspend TAIKO deposits until further notice.
The exploit adds to a brutal year for cross-chain bridge security. A DefiLlama tracker counts more than 20 crypto hacks in June alone. Notable bridge-related breaches in 2026 include Gravity Bridge ($5.4 million), Axelar-Secret Network ($4.67 million), and Hyperbridge ($2.5 million). The largest single exploit of the year targeted KelpDAO's LayerZero-based bridge for approximately $292 million in April.
Taiko said all proposers have temporarily stopped producing new blocks while the team investigates and works to resolve the issue. The network effectively came to a standstill as a containment measure, preventing further transactions or potential exploitation during the assessment. The team has not yet released a detailed post-mortem or timeline for resuming block production.
This article is for informational purposes only and does not constitute investment advice.
[1] Ethereum Layer 2 Taiko halts block production following exploit; urges users to withdraw funds[2] Taiko Exploit Adds to June Tally of Over 20 Crypto Hacks[3] Taiko Urges Bridge Withdrawals After Chain Verification Breach - The Crypto Times[4] Taiko Urges Immediate Bridge Withdrawals After $1M Exploit Compromises Chain Security - Bitcoin World[5] Taiko Confirms Breach in Verification Mechanism, Urges Immediate Bridge Withdrawals - bloomingbit
