Taiko Outlines Staged Recovery Plan After $1.7M Bridge Exploit

Highlights:

• Taiko says the June 21 attack path has closed after an independent review.
• Bridge assets will regain 1:1 backing before full access returns.
• Transfers, swaps, and trading will resume before bridge withdrawals fully reopen.

Taiko has outlined a four-step restart plan after the June 21 bridge attack that halted network operations. The Ethereum layer-2 project said on an X post on Sunday that the attack path has been closed after outside security experts reviewed the fixes. The team also said users will not lose funds, as recovery work now moves into a staged restart.

The breach hit the network’s bridge vault and led to losses of $1.7 million. The project confirmed a compromise in its chain-state verification system and urged users to remove bridge funds, and also asked exchanges to pause deposits while engineers contained the issue.

Security Review Clears the Restart Path

The first recovery step focuses on deploying technical fixes and checking the chain’s finalized state. The team said this review must confirm that no forged checkpoints remain reachable. It also must block any attacker claims before the network resumes normal activity.

According to the update, the Security Council will handle key actions during the restart. The group will review the fixes, confirm the final state, and later submit the proposal that reopens bridge operations. That process places the first stage under internal control.

Taiko is ready to come back online.

The June 21 attack path is closed, the fixes have been reviewed by independent security experts, and we have a clear, staged plan to restore the chain. We're doing it in four careful steps, to ensure user’s security and stability before it…

— Taiko.eth 🥁 (@taikoxyz) June 28, 2026

Security firm Blockaid linked the exploit to flawed source-signal proof checks. The firm said crafted message proofs reached Ethereum without matching valid events on the layer-2 network. As a result, attackers released assets from the ERC20 Vault without proper authorization.

Taiko Bridge Backing Moves Ahead of Access

The second step will replenish the bridge before users regain full access. The team said every L2 asset will carry 1:1 backing, with proof available on-chain. Therefore, users can check the backing instead of relying only on public statements. The step is significant because matched assets across networks are essential to bridges. Weak backing can result in loss of confidence in the wrapped balances following an exploit. Therefore, the team will settle on backing before trading and swaps return.

The project will resume L2 activity once the bridge holds full backing. Transfers, swaps, and trading will be restored prior to the full reopening of the bridge. This order enables the network to run while being monitored more closely.

Bridge Reopening Will Follow Stable Finalization

The final step will reopen the bridge after the network shows stable finalization. The Security Council will send the unpause proposal after the team confirms that operations run normally. Once that proposal passes, users can move funds to and from the network.

The project said it will use conservative withdrawal quotas when the bridge reopens. However, it said those limits should not stop users from moving assets. The limits will add another control during the first phase of restored operations during early restart work. The team also said there is no claim site linked to the recovery. It added that it will not contact users first through direct messages. The notice addresses scams that often follow crypto exploits, including fake support pages and recovery links.

The breach adds pressure to cross-chain infrastructure after several recent bridge failures. Syscoin paused its bridge on June 8 after attackers created about 5 billion fake SYS tokens. Gravity Bridge also lost $5.4 million in a suspected signing-key breach. In May, another bridge, Verus-Ethereum, was drained of $11.5 million through forged cross-chain transfer messages. However, the exploiter returned part of the funds after a bounty offer.

Taiko’s native token, TAIKO, is trading around $0.06555, down by 1.40% over the last 24 hours. Its market cap and trading volume stand at $12 million and $3.9 million, respectively.