Taiko Bridge Exploit Hits $1.7M as Ethereum Layer-2 Network Urges Users to Withdraw Funds
Ethereum layer-2 network Taiko has suffered a major security breach after a flaw in its chain state verification system allowed attackers to bypass bridge protections and withdraw assets without proper authorization.
The protocol confirmed that its bridge infrastructure had been compromised, warning users that the security guarantees of bridges deployed on Taiko could no longer be trusted.
“We have confirmed a compromise of Taiko’s chain state verification mechanism,” the project said in a statement shared on X. “As a result, the security assumptions of all bridges deployed on Taiko can no longer be relied upon.”
Taiko advised users to immediately remove funds from all connected bridges while the team worked with ecosystem partners to contain the incident and suspend affected systems.
The attack targeted Taiko’s ERC20 Vault and bridge verification process, with blockchain security analysts identifying a weakness that allowed fraudulent messages to appear valid on Ethereum despite lacking legitimate confirmation from the Taiko network.
Security firm Blockaid explained that attackers exploited a validation flaw in the bridge’s source signal verification process. The vulnerability enabled fake bridge messages to be registered and later claimed, leading to unauthorized asset withdrawals.
Estimates of the stolen funds vary, with Blockaid reporting losses of at least $1 million, while other security researchers including Lookonchain and PeckShield placed the total damage closer to $1.7 million.
Following the exploit, the attacker moved nearly 2 million TAIKO tokens, valued at roughly $189,000, to crypto exchange MEXC, according to PeckShield. The TAIKO token has struggled significantly since its 2024 highs and remains far below its peak price.
Blockchain analytics platform Arkham Intelligence also tracked exploiter-controlled wallets holding more than $1.5 million worth of assets, with the majority held in Ethereum (ETH).
The Taiko incident adds to a growing wave of decentralized finance security breaches in June. According to DeFiLlama data, more than 20 crypto-related exploits have been recorded this month, highlighting ongoing risks across bridges, smart contracts, and liquidity platforms.
Other major incidents recently include the Humanity Protocol exploit, which caused losses exceeding $30 million, and the Syscoin Bridge attack that drained more than $8 million.
The latest wave of attacks also follows a $4.67 million smart contract exploit affecting Secret Network and a separate $1.1 million liquidity pool drain involving the OLPC/LABUBU pool on PancakeSwap.
With bridge vulnerabilities continuing to rank among the most damaging attack vectors in crypto, Taiko’s exploit once again raises concerns around cross-chain security and the challenges of maintaining trustless blockchain infrastructure.