Cardano Network Recovers After Temporary Fork Triggered by Malformed Transaction

TLDR

• Cardano experienced a temporary fork due to a malformed delegation transaction.
• Node upgrade to version 10.5.3 restored the network to a single chain.
• FBI is investigating the incident as a potential cyberattack.
• No user wallets or funds were compromised in the event.

A rare and unexpected event shook the Cardano blockchain on November 20 when a malformed delegation transaction triggered a critical chain split. Caused by a previously known deserialization bug in a cryptographic library, the issue temporarily divided the network into two separate chains.

While no user funds were lost, the disruption prompted immediate action from Cardano engineers and caught the attention of federal authorities. Now, with the FBI investigating, the network’s quick recovery highlights the strength of its underlying infrastructure.

Hoskinson Praises Network Design and Fast Recovery

Charles Hoskinson highlighted the network’s ability to withstand such an issue without losing user funds. He emphasized the engineering team’s swift response in identifying the problem and rolling out fixes within hours.

“The network survived. It didn’t stop,” Hoskinson stated, expressing confidence in Cardano’s architecture and stakeholder coordination. He added that while validators temporarily missed block rewards, recovery is progressing, and full normalcy is expected in the coming weeks.

The incident occurred just days ahead of the planned launch of Cardano’s new token, NIGHT, scheduled for December 8. The Midnight Summit keynote, where the launch was announced, reaffirmed Cardano’s ongoing development roadmap despite the recent disruption.

Intersect, Input Output, and the Cardano Foundation continue to monitor node performance and have advised all operators to remain on version 10.5.3 or higher until further notice.

Chain Partition Caused by Cryptographic Bug

On November 20, the Cardano blockchain experienced a rare chain partition due to a crafted, malformed delegation transaction. According to Intersect, the transaction exploited a deserialization bug in a cryptographic library, which had previously been identified on the Preview testnet in 2022.

This bug allowed a transaction to bypass validation and led the blockchain to split into two chains — one containing the invalid transaction and one without it. The issue first appeared on the testnet, followed shortly by its occurrence on the mainnet.

Node Upgrades Restore Chain Stability

Cardano engineers responded quickly after detecting the chain split. They worked overnight in coordination with Input Output, Intersect, and the Cardano Foundation. Together, they developed and deployed a hotfix and issued a node upgrade to version 10.5.3.

Stake pool operators and other node operators were advised to upgrade immediately. The updated node version successfully resolved the partition by converging all nodes back onto a single, validated chain. According to Intersect, full resynchronization is still ongoing but well underway.

“No user funds were compromised during the incident,” confirmed Intersect in its official report. Most user wallets were not affected since they used node components that did not process the malformed transaction.

FBI Investigation Launched as Wallet Owner Admits Fault

The wallet responsible for the malformed transaction was quickly identified through forensic analysis. Investigators linked it to a former participant in Cardano’s Incentivized Testnet. Following this, the FBI was contacted to examine the case as a possible cyberattack on a public blockchain.

Shortly after the wallet was identified, an X user named “Homer J” came forward. He publicly admitted to submitting the transaction, calling it a careless experiment that unintentionally split the network. “I didn’t short ADA or profit from this. I just feel terrible,” the user posted on X.

Charles Hoskinson, Cardano’s founder, addressed the situation during a public statement. “This person is now trying to walk back the confession after realizing the FBI is involved,” he said.

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