Upbit, Bithumb freeze INJ as Injective stops producing blocks

Bithumb has said that it is suspending INJ deposits and withdrawals starting from November 9, 23:00 KST. Upbit is also taking a similar action, as it released a notice the same day informing its users that it is suspending INJ deposits and withdrawals temporarily, effective from the time of the release.

Injective’s blockchain stopped producing blocks for the second time in about ten weeks on Monday, November 9, and this is the reason the Korean exchanges are pulling the plug on its token for now.

The first time it occurred in late August, the blockchain said it was due to an upgrade. It has not said anything this time around.

What did Bithumb tell its users concerning INJ?

Bithumb reportedly told its users that it would freeze INJ deposits and withdrawals because Injective is no longer producing blocks.

Spot trading for INJ is still open during the pause; however, there won’t be staking and unstaking activities until the network stabilizes.

Bithumb said that it would reopen transfers once the chain is stable, while adding that it will update its original note then.

Withdrawals that are requested before the deadline but have not been settled will clear in order according to the exchange. However, deposits that are made when the freeze is already in place will be credited once service returns.

INJ withdrawals are also reportedly locked on Binance, alongside NEAR and LTC. However, Hyperliquid’s HYPE is no longer on that list on the exchange.

The holders of the INJ token who move tokens between exchanges or run them through staking are faced with the same dilemma they faced the last time the blockchain stopped producing, which is stuck funds.

The problem is expected to persist until the chain restarts block production.

The August stoppage Injective called an upgrade

Injective’s chain did not produce any blocks for roughly three hours and 42 minutes on August 31.

Following the incident, Injective said in an official statement that was posted on September 1 that the contributors had “coordinated an accelerated network upgrade that took longer than initially expected.”

It insisted the blockchain and INJ “remained secure throughout.” Injective’s CEO Eric Chen described the incident as an upgrade rather than a halt.

Upbit was one of the exchanges that paused INJ deposits and withdrawals following the August incident. It said that Injective’s block production halt was the reason for the pause.

Upbit’s wording drew criticisms for Injective, which had tried to frame the incident as an upgrade.

A $4.9 million exploit behind the first halt

The reason for the upgrade, which resulted in the stoppage of block production, was due to an exploit. Injective confirmed this in its post on X, stating, “The accelerated upgrade followed an exploit affecting a small number of ecosystem applications operating binary options markets.”

However, it said it was not an exploit of Injective. Metaverse Post, citing on-chain researcher Paddy-earthling, traced the attack to a market identifier collision in Injective’s core code.

By reusing an INJ-denominated insurance fund that collided with a USDC binary-options market, the attacker ran self-matched trades across his own subaccounts and pulled out roughly twice the collateral he put in on each cycle.

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

Injective has still not published a full postmortem. Loss estimates have ranged from about $2.79 million to $6.5 million, and the foundation has named no figure of its own.

Critics also pointed to Injective pulling its core chain repositories from GitHub, arguing the exploit showed that hiding source code did not prevent the bug from being found.

A halt in the middle of a Wall Street moment

The latest development is happening at the worst time for Injective. The company has spent the past week courting institutions. Canary Capital’s staked INJ ETF began trading on Nasdaq under the ticker INJC on November 5, and Chen rang the Nasdaq opening bell with Canary CEO Steven McClurg on November 6.

Injective promoted that event on X as moving “from a dorm room in 2018” to “the center of Wall Street.”

The fund held $16.12 million in net assets after two sessions, though its share count stayed flat at 600,000, meaning the asset gain did not reflect new subscriptions. INJ traded near $8.10 on Monday, up 12.74% for the week, well above the roughly $4.85 level it held during the August incident.