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

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.

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.