Cardano Divides into Two Chains Briefly Following Alleged AI-Generated Exploit on Known Vulnerability

Cardano Experiences Temporary Chain Split After Malformed Transaction

Cardano briefly split into two chains on Friday after a malformed transaction was processed differently by older and newer node versions, causing a network divergence.

According to Intersect, the Cardano ecosystem governance body, newer nodes accepted the malformed transaction while older nodes rejected it. This exploited a bug in a software library that the validation logic failed to catch, leading some block producers to build on a “poisoned” chain while others remained on the canonical “healthy” chain.

The transaction originated from a wallet tied to a former testnet participant, and the incident is under investigation as a potential cyberattack. Developers quickly released patched node software, and operators were instructed to upgrade to rejoin the canonical chain.

Exchanges and wallet providers temporarily paused deposits and withdrawals as a precaution. Intersect confirmed that no user funds were lost, and most retail wallets were insulated because they ignored the malformed transaction safely.

Cardano co-founder Charles Hoskinson described the incident as a targeted attack by a disgruntled stake-pool operator seeking to harm the reputation of Input Output Global (IOG). He noted that the disruption affected block producers, who lost rewards, and DeFi protocols, which experienced inconsistent states, warning that full network recovery could take weeks.

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