Taiko halted block production and suspended bridge activity after an attacker exploited its cross-chain infrastructure to steal approximately $1.7 million.
The Ethereum Layer 2 network also urged users to remove funds from its remaining bridges while the team investigated the breach.
How Taiko Was Hacked
The attacker reportedly forged the proofs used to confirm that a withdrawal on Ethereum matched a legitimate deposit on Taiko. Because the false proofs were accepted, the attacker could request assets from the Ethereum side of the bridge without first depositing matching funds on Taiko.
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Security firm BlockSec said its initial investigation pointed to a possible exposed signing key connected to Raiko, Taiko’s system for producing transaction proofs. The key may have been publicly accessible on GitHub rather than protected inside secure hardware, allowing the attacker to register fraudulent provers and submit apparently valid withdrawal instructions.
Taiko’s Response to the Incident
Taiko responded by stopping new blocks, shutting down withdrawals through its main bridge and token vault, and asking centralized exchanges to suspend TAIKO deposits. The attacker had already transferred roughly 2 million TAIKO tokens, worth around $170,000 at the time, to an address associated with MEXC.
As a result, TAIKO lost over 12% in price during the last 24 hours, according to CoinMarketCap.
Although the total loss was relatively limited, the attack used the same general class of forged cross-chain messages behind larger bridge incidents. According to Phremex, DeFi exploits have reportedly caused more than $750 million in losses across at least 14 incidents in 2026.
The case now puts fresh pressure on Layer 2 teams to secure the keys and proof systems connecting their networks to Ethereum. Taiko said it plans to publish a full incident report after completing its investigation.
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