INJ transfers frozen after Injective’s block-production halt

Bithumb reportedly froze INJ deposits and withdrawals after Injective stopped producing blocks, and on-chain researchers put an earlier exploit at roughly $4.9 million.

Upbit had also paused INJ deposits and withdrawals after the earlier August outage. Spot trading remains open at Bithumb, but staking and unstaking are unavailable until the network stabilizes.

On August 31, Injective produced no blocks for roughly three hours and 42 minutes. In a September 1 statement, the contributors said they had “coordinated an accelerated network upgrade that took longer than initially expected.” The network maintained that the blockchain and INJ stayed secure throughout.

CEO Eric Chen described the episode as an upgrade rather than a halt. Upbit’s wording drew criticism for Injective’s effort to frame the incident as an upgrade.

The exploit behind the upgrade

In a post on X, Injective wrote: “The accelerated upgrade followed an exploit affecting a small number of ecosystem applications operating binary options markets.” The network said the attack was not an exploit of Injective itself.

Metaverse Post, citing on-chain researcher Paddy-earthling, traced the attack to a market identifier collision in Injective’s core code. The attacker reused an INJ-denominated insurance fund that shared an identifier with a USDC binary-options market. He then ran self-matched trades across his own subaccounts, extracting roughly twice the collateral deposited in each cycle.

The attacker created 299 instant binary-options markets over about 19 hours. Each used an oracle set that would never report a price, forcing a refund path. Researchers estimated that about $4.9 million was bridged to Ethereum and parked in a single wallet, where it sat unmoved.

Injective has not published a full postmortem. Published loss estimates range from about $2.79 million to $6.5 million, and the foundation has not named its own figure.

Critics also cited Injective pulling its core-chain repositories from GitHub. They argued that keeping the source code hidden failed to prevent discovery of the bug.

What does the freeze change for INJ holders?

Bithumb’s notice says it will restore transfers once the chain is stable and update the original notice then. Withdrawals requested before the deadline but still unsettled will clear in order. Deposits submitted during the freeze will receive credit only after service returns.

Holders who move tokens between exchanges or use staking face stuck funds until block production restarts. The constraint mirrors the one they faced after the previous halt.

Binance reportedly locked INJ withdrawals alongside NEAR and LTC. Hyperliquid’s HYPE was no longer on the exchange’s withdrawal list.

An institutional test under pressure

Injective spent the past week courting institutions as its network faced fresh transfer restrictions. Canary Capital’s staked INJ exchange-traded fund began trading on Nasdaq on November 5 under the ticker INJC. On November 6, Chen joined Canary CEO Steven McClurg at the Nasdaq opening bell.

The fund held $16.12 million in net assets after two trading sessions. Its share count stayed flat at 600,000, meaning the asset gain did not reflect new subscriptions. Injective promoted the Nasdaq event on X by tracing the project’s path from a dorm room in 2018 to Wall Street.

INJ traded near $8.10 on Monday, up 12.74% for the week and well above the roughly $4.85 level recorded during the August incident. The fund’s flat share count left the connection between token performance and new institutional subscriptions unproven.

Bithumb has promised to update its notice after stabilization but has set no deadline. Until block production resumes and Injective publishes a full postmortem, transfers and staking remain constrained.