Taiko, an Ethereum layer 2 scaling solution, was exploited. This was after its chain-state verification mechanism failed, resulting in the attacker bypassing critical validation checks. As a result, the attacker successfully drained approximately $1.7 million from the ERC20 Vault and the Taiko Bridge Proxy Contracts. After breaching Taiko, the attacker immediately consolidated the stolen assets and then transferred them to various wallets.