Cardano's $15 billion blockchain network suffered a significant technical failure when a malformed transaction exploited a longstanding bug, resulting in a temporary split of the blockchain into two incompatible chains. The unprecedented security incident on November 20 sent shockwaves through the cardano news landscape as the ADA cardano price dropped by up to 16% during the turmoil before stabilizing around $0.41.
The chain partition disrupted essential services including wallet functionality, block explorers, and several DeFi protocols across the network. According to multiple sources, the FBI is already investigating the incident, which has elevated concerns about blockchain security vulnerabilities. The exploit occurred when a crafted, malformed delegation transaction passed validation on newer node versions but was rejected by older ones, consequently creating parallel chains on the cardano tracker.
Fortunately, the network converged back to a single chain within 14.5 hours after the system's nodes were upgraded. The responsible user has since confessed that the transaction was created using AI-generated instructions, though some skeptics believe the apology came only because of awareness about the ongoing criminal investigation.
FBI launches investigation into Cardano chain split
Federal authorities have entered the Cardano investigation after the network experienced its first major chain split in eight years. The Cardano Foundation formally referred the matter to law enforcement, demonstrating how seriously blockchain organizations treat security breaches, even seemingly accidental ones.
Charles Hoskinson, Cardano's founder, revealed the FBI's involvement while rejecting the notion that the incident was merely an innocent mistake. “When a disruption affects people's money and commercial activity, it takes on the scale of an economic attack,” Hoskinson emphasized.
The FBI investigation focuses on examining the technical details of the deserialization bug, reviewing communication around the security test, and assessing potential damage to network integrity. Hoskinson described the situation as having “stirred up a hornet's nest,” noting that such actions constitute serious crimes in many jurisdictions.
Furthermore, the incident prompted an IOG employee known as “effectfully” to resign, citing fears of potential legal repercussions for development errors. “Just submitted my resignation letter. I've seen colleagues make similar mistakes. I didn't realize there was a risk of getting raided by authorities,” the employee stated.
Meanwhile, these cardano news continue to impact the broader ada cardano price discussion as markets react to this unprecedented security event.
Malformed transaction causes Cardano network to fork
The technical specifics of the Cardano incident revealed a complex vulnerability that had remained dormant in the system for years. On November 21, at approximately 08:00 UTC, the blockchain experienced a dramatic divergence as a single malformed delegation transaction exploited a deserialization bug dating back to 2022. This critical flaw allowed an oversized hash to pass initial validation checks despite being technically invalid.
As a result, Cardano's network split into two parallel ledgers – one containing the “poisoned” transaction that newer nodes accepted, another “healthy” chain where older nodes correctly rejected it. Despite this division, both chains continued producing blocks simultaneously throughout the incident.
The discrepancy created immediate challenges across the ecosystem. Major exchanges including Coinbase temporarily suspended ADA deposits and withdrawals as a precaution. However, Intersect confirmed that no user funds were compromised in the process.
Cardano's engineering teams responded swiftly, deploying emergency patches within three hours of detecting the split. Stake pool operators received instructions to upgrade their nodes to rejoin the canonical chain. Eventually, network consensus was re-established the following day after coordinated efforts from IOG, Intersect, the Cardano Foundation, and EMURGO.
The cardano price today reflected market uncertainty as the technical details emerged across cardano news outlets, highlighting how even established protocols remain vulnerable to specific edge-case exploits.
Developer confesses as Hoskinson alleges premeditated attack
Shortly after the incident, a self-identified Cardano stake pool operator using the pseudonym “Homer J” publicly took responsibility for triggering the network disruption. The individual claimed the action began as a personal challenge to reproduce the problematic transaction but spiraled out of control after using AI-generated instructions to block traffic on their Linux server without proper testnet validation.
“I'm ashamed of my carelessness,” Homer J wrote on social media platform X. “I didn't have evil intentions, but I endangered the network and caused unnecessary stress”.
In contrast, Cardano co-founder Charles Hoskinson rejected this explanation, describing the incident as a calculated strike against the ecosystem. “There was a premeditated attack from a disgruntled SPO who spent months actively looking at ways to harm the brand and reputation of IOG,” Hoskinson stated. Specifically, he claimed the attacker targeted his personal pool.
Hoskinson additionally revealed the FBI had launched an investigation into the matter. “It was absolutely personal and now he's trying to walk it back because he knows the FBI is already involved,” he noted.
The situation ultimately led to the resignation of an IOG employee known as “effectfully,” who cited concerns that routine development errors might now carry legal risk. “I didn't realize there was a risk of getting raided by the authorities,” the developer wrote.