Image Credit: Taiko
Key Takeaways
- An attacker forged cryptographic withdrawal proofs using an exposed signing key for Raiko, Taiko’s proof-generation system, draining approximately $1.7 million from the bridge and token vault.
- Taiko halted block production within hours, urged users to withdraw all funds, and asked centralized exchanges to suspend TAIKO token deposits; the exploiter moved roughly $170,000 in TAIKO to MEXC before the freeze.
- The same forged cross-chain proof mechanism has driven more than $340 million in bridge losses across at least 14 incidents in 2026, including $292 million from Kelp DAO in April.
Taiko, an Ethereum layer-2 network, shut down block production and urged users to withdraw funds after an attacker exploited a flaw in its bridge to steal approximately $1.7 million. The chain’s TAIKO token dropped more than 20% since midnight UTC; the token carried a market capitalization of $14.5 million at the time.
Attacker Forged Withdrawal Proofs to Drain Bridge and Token Vault
The exploit centered on the attacker’s ability to forge the cryptographic proofs a bridge uses to verify that a withdrawal corresponds to a real deposit. Fake withdrawal requests were accepted on Ethereum without any matching transaction on Taiko’s chain, allowing the attacker to register fraudulent withdrawals and drain funds from both the bridge and its token vault, Taiko said.
Security firm BlockSec said its initial investigation traced the likely cause to a signing key for Raiko, the proof-generation system Taiko uses to confirm that transactions are genuine, that was left publicly accessible on GitHub.
“@taikoxyz was reportedly attacked, with losses exceeding $1.7M. Our initial investigation suggests the likely root cause was an exposed Raiko SGX enclave signing key on GitHub. Raiko is Taiko’s multi-prover stack for Taiko and Ethereum blocks, so an exposed Raiko SGX enclave key could directly impact Taiko’s on-chain proof verification path.”
That key is designed to remain sealed inside secure hardware so that the proofs it produces can be trusted. When exposed, attackers can register their own provers as legitimate, sign fraudulent proofs that Taiko’s verifier accepts, and then initiate fake bridge withdrawals that release real assets on Ethereum.
Taiko Froze Activity Within Hours, Exploiter Moved Funds to MEXC
Taiko urged all users to withdraw from every bridge on the network, asked centralized exchanges to suspend deposits of its TAIKO token, and directed its block producers to stop generating new blocks during the investigation.
By approximately 2 a.m. ET, Taiko said the exploit had been contained and that withdrawals through the main bridge and token vault had been halted. The exploiter had already moved approximately 2 million TAIKO, worth roughly $170,000, to an account on the MEXC exchange before activity was frozen, according to onchain data.
Same Cross-Chain Proof Flaw Behind $340 Million in 2026 Bridge Losses
The exploit mechanism is not isolated to Taiko. Blockchain security firm PeckShield documented 14 cross-chain bridge exploits that drained $340.7 million from DeFi protocols in 2026, including a $292 million loss at Kelp DAO on April 18 and $11.58 million drained from the Verus-Ethereum bridge on May 18, both involving flaws in cross-chain verification.
Taiko’s losses remained comparatively limited because the team identified and froze the outflows within hours. Bridge exploits have produced more than $340 million in losses across at least 14 incidents so far this year, according to PeckShield. Taiko, which launched on Ethereum in May 2024, said it is preparing a full incident report.
