Taiko's ERC20 Vault on Ethereum has been compromised, resulting in losses exceeding $1 million. The breach was identified by Blockaid monitoring, which revealed a vulnerability in the source signal proof verification of Taiko's cross-chain bridge. The flaw allowed a fabricated message proof to be accepted as valid on Ethereum L1, despite lacking a legitimate MessageSent event on the Taiko source chain. This enabled the attacker to register and extract fraudulent cross-chain messages, leading to unauthorized asset withdrawals from the ERC20 Vault.