Taiko halted its Ethereum layer 2 network on June 22, 2026, after an attacker drained roughly $1.7 million from its cross-chain bridge using forged withdrawal proofs. The team paused both the Bridge and ERC20Vault contracts through its Security Council, stopped block production, and told users to withdraw funds. The TAIKO token fell more than 20% within hours, sliding to an all-time low against a market capitalization of about $14.5 million.
A blockchain bridge is a piece of software that lets users move assets between two separate networks, such as Ethereum and a layer 2 built on top of it. Bridges hold deposits on one chain and release matching funds on the other, which makes them one of the most attacked components in crypto.
Key takeaways
- An attacker drained about $1.7 million from Taiko’s bridge and ERC20Vault by forging withdrawal proofs.
- Security firms BlockSec and Quill Audits traced the breach to an RSA-3072 SGX signing key left publicly readable in Taiko’s open-source GitHub repository.
- Taiko’s Security Council paused the Bridge and ERC20Vault and halted block production to contain the loss.
- The flaw mirrors the cross-chain messaging weakness behind more than $340 million in bridge hacks recorded so far this year.
Published: June 23, 2026 09:00 UTC
How the attack worked
The attacker forged the cryptographic proofs that Taiko’s bridge uses to confirm a withdrawal matches a real deposit. Fake withdrawal requests were accepted on Ethereum with no matching transaction on Taiko’s chain, which let the attacker register fraudulent withdrawals and pull funds from the bridge and its token vault across two phases.
The root cause was an operational error rather than a flaw in the protocol’s economic design. According to an analysis from Quill Audits, an RSA-3072 private key used to sign Intel SGX enclaves was committed to the public taikoxyz/raiko repository as a file named enclave-key.pem. Security firm BlockSec, through its Phalcon monitoring arm, identified the same leaked signing key as the likely source of the breach.
Because Taiko’s layer 1 contracts trusted any enclave matching the stored signer value derived from that public key, the attacker registered malicious SGX prover instances, generated fake layer 2 state attestations, and convinced the verification contracts that fraudulent withdrawals were legitimate.
What an SGX prover is and why it failed
An SGX prover is a trusted hardware component that generates cryptographic attestations confirming a layer 2 network processed transactions correctly. Intel’s SGX technology runs code inside a sealed enclave so the output can be trusted without re-executing the work on Ethereum.
That trust model collapses the moment the signing key leaves the enclave. Once the private key sat in a public repository, anyone could mint attestations that the system would accept as genuine. The hardware did its job. The key handling did not.
Why it matters for the layer 2 market
Bridge exploits remain the most expensive failure mode in crypto, and this one lands during a year in which the same class of cross-chain messaging bug has cost the industry more than $340 million. The dollar figure here is small next to past disasters, but the cause is familiar: a single secret, poorly handled, undoing an entire trust system.
For traders, the immediate damage shows in the TAIKO token, down more than 20% on the day. For developers, the lesson points at operational security, not protocol math. Multi-prover designs were meant to reduce single points of failure, yet a key checked into version control reintroduced one. Taiko said it will publish a full incident report, which other layer 2 teams running SGX-based proving will read closely.
What comes next
Taiko’s near-term priority is restoring the network safely and confirming the full scope of the loss before reopening the bridge. The team has signaled a complete post-mortem, and on-chain investigators including BlockSec are tracking the stolen funds across wallets. Expect renewed scrutiny of how layer 2 teams store and rotate signing keys, and likely faster adoption of secret-scanning tools that catch credentials before they reach a public repository.
Frequently asked questions
How much did the Taiko bridge exploit cost?
The attacker drained roughly $1.7 million from Taiko’s bridge and ERC20Vault before the team paused the contracts. Taiko estimated the figure and said a full incident report with a final accounting will follow.
What caused the Taiko breach?
Security firms BlockSec and Quill Audits traced it to an RSA-3072 SGX signing key committed to Taiko’s public GitHub repository. The exposed key let the attacker forge prover attestations and approve fraudulent withdrawals.
Are user funds on Taiko safe now?
Taiko’s Security Council paused the Bridge and ERC20Vault and halted block production to stop further outflows. The team urged users to withdraw funds and is working to restore the network before reopening the bridge.
