Initia halts L1 after $605,000 USDC outflow tied to compromised rollup keys

Initia halted its L1 chain after roughly $605,000 in USDC flowed out, with the team's preliminary investigation pointing to compromised rollup infrastructure keys used to fabricate cross-chain transfers. The halt and key compromise raise concerns about the security of Initia's rollup and bridge design, and the incident could weigh on confidence in modular and interchain projects more broadly. Traders holding INIT or assets bridged through Initia should watch for a post-mortem and any indication of whether the loss is covered.