Taiko’s cross-chain bridge is back online. The Ethereum Layer 2 rollup has completed its recovery from a June 21 exploit that drained roughly $1.7M from its bridge and ERC20 Vault contracts, and the team says no user funds were lost in the process.

The reopening caps off a methodical, multi-stage recovery effort that included halting the entire network, replenishing bridge reserves to full 1:1 backing, and subjecting the fix to an independent security review before flipping the switch back on.

What happened on June 21

The exploit was traced to a flaw in Taiko’s chain-state and proof verification processes. Specifically, a compromised SGX signing key had been mistakenly posted to GitHub, which gave the attacker the ability to forge withdrawal proofs and siphon assets from the bridge.

Approximately $1.7M was stolen. The attacker subsequently transferred around 2M TAIKO tokens, worth roughly $170K at the time, to the MEXC exchange.

Taiko’s response included halting block production entirely, pausing the bridge and ERC20 Vault, and requesting that exchanges temporarily suspend TAIKO deposits.

The four-stage recovery

By June 29, the Taiko team had outlined a comprehensive four-stage recovery plan. Stage one: close the attack vector by patching the proof verification flaw and ensuring the compromised SGX key could no longer be used to forge withdrawals. Stage two: replenish bridge reserves to full 1:1 collateralization before reopening. Stage three: restore Layer 2 network activity so that normal operations could continue on-chain. Stage four: reopen the bridge under controlled quotas rather than all at once.

By June 30, the network was fully operational again with assets confirmed as completely backed at a 1:1 ratio. A Security Council oversaw the final bridge unpause, and an independent security review was completed before the reopening got the green light.

Market impact and token performance

The TAIKO token dropped approximately 10% following the exploit, sliding to near all-time lows around $0.07. Trading liquidity remained relatively stable throughout the incident.

A broader bridge problem

Cross-chain bridges have become one of crypto’s most persistent security headaches, with over $340M in bridge-related losses reported across various incidents throughout 2026 alone.

Taiko’s specific vulnerability, a signing key accidentally committed to a public GitHub repository, is an operational security failure rather than a flaw in the underlying cryptography or consensus mechanism. No user funds were lost, and the team achieved full 1:1 recollateralization before reopening, with the bridge now operating under controlled access quotas.