Taiko ERC20 Vault Hacked for Up to $1.7 Million as Chain Verification Flaw Exposed

On Monday, Taiko, an Ethereum Layer 2 protocol, suffered a security incident when an attacker took advantage of a vulnerability in its bridge verification system, resulting in an estimated loss between $1.5 million and $1.7 million from the ERC20 Vault. Blockaid was the first to report the breach, indicating initial losses exceeding $1 million. This vulnerability permitted the acceptance of fraudulent bridge messages on Ethereum L1. PeckShield later assessed the total losses to be around $1.7 million. The perpetrator transferred 1.99 million TAIKO tokens, valued at roughly $189,000, to MEXC, while 870.8 ETH, nearly $1.52 million, remained in the attacker’s wallets. Taiko has since suspended the Bridge and ERC20Vault, advising users of paused transactions and urging centralized exchanges to halt TAIKO deposits.