FBI Alerted as Cardano Mainnet Splits Into Two Chains Following AI-Assisted Transaction Error: What Happened?

Cardano Network Splits After Rare Transaction Exploit Exposes Long-Standing Node Bug

Cardano’s reputation for stability was put to the test when an unusual transaction disrupted the network’s shared reality, leaving parts of the blockchain operating on two different versions of history at the same time.

What began as a technical abnormality quickly developed into one of the most serious incidents in the project’s eight-year history, affecting exchanges, decentralised applications, developers and everyday users of ADA.

Faulty Delegation Transaction Triggers Network Divide

The disruption started around 08:00 UTC when a deliberately crafted delegation transaction slipped past validation checks on some newer nodes while being rejected by older versions.

This created two incompatible ledger states, effectively splitting the blockchain into separate paths.

One chain accepted the transaction, while the other refused it, leading to conflicting data and uncertainty over which version was the “real” Cardano.

According to Intersect’s incident report, the abnormal behaviour closely mirrored an earlier issue detected on Cardano’s test network a day earlier, suggesting the weakness may have been probed before it hit the mainnet.

The report said,

“It is important to note that the network did not stall. Block production continued on both chains throughout the incident, and at least some identical transactions appeared on both chains.”

Exchanges and Services Pause Operations Amid Uncertainty

As nodes struggled to agree on a single chain, major crypto exchanges moved to protect user funds.

Coinbase recorded the longest interruption, stopping ADA deposits and withdrawals from 12:15 UTC on 21 November through 02:10 UTC on 22 November, a gap of roughly 14 hours.

Other platforms, including Upbit and Kraken, enforced shorter suspensions while validating the integrity of the ledger.

Block explorers showed mixed or frozen data.

DeFi applications became unreliable, as some transactions were confirmed on one chain and not the other.

Confirmation times stretched from seconds to minutes, and some transfers failed entirely while the network remained divided.

Emergency Fixes Deployed as Developers Race to Restore Consensus

Within hours, teams from Input Output Global, the Cardano Foundation, Intersect and EMURGO coordinated an urgent response.

Emergency patches were issued within three hours of detecting the issue, and node operators were encouraged to update as quickly as possible.

By 22 November, natural consensus had allowed the network to converge again onto a single “healthy” chain.

A deeper technical explanation later revealed the root of the problem: a deserialisation hash error dating back to 2022, linked to a feature that was not widely used until last year.

A hash of excessive size in a malformed delegation transaction passed initial checks, when it should have been rejected.

Despite the seriousness, development teams confirmed that user funds remained safe.

Market Reaction and Temporary Price Drop

The incident sent a brief wave of uncertainty through the market.

ADA dropped by as much as 16 per cent during the disruption before recovering part of the loss, later trading around $0.41.

Some analysts noted that the price movement was in line with the wider market decline at the time, suggesting broader sentiment also played a role.

Perpetrator Steps Forward With Public Apology

An X user operating under the name “Homer J” claimed responsibility for submitting the transaction that triggered the split.

He described the act as a failed experiment rather than a malicious attack.

“It started off as a ‘let’s see if I can reproduce the bad transaction’ personal challenge and then I was dumb enough to rely on AI’s instructions on how to block all traffic in and out of my Linux without properly testing it on testnet first, and then watched in horror as the last block time on explorers froze.”

He clarified,

“I didn’t sell any ADA coins before my ‘production testing,’ didn’t short, didn’t work with anyone on this, and didn’t plan the attack long and carefully.”

He expressed deep remorse for his error and was ready to face the repercussions.

“I'm ashamed of my carelessness and take full responsibility for it and whatever consequences will follow.”

“I do have a lot to lose as a consequence of my actions. Sorry, Cardano community, I truly am.”

Hoskinson Responds and Authorities Are Informed

Charles Hoskinson, Cardano founder and IOG co-founder, took a much firmer stance.

He publicly labelled the action a personal and premeditated attack on the network and its reputation.

Hoskinson wrote,

“It was absolutely personal and now he’s trying to walk it back because he knows the FBI is already involved.”

He later said that the incident amounted to interference with a digital network and confirmed that law enforcement had been notified for further investigation.

Intersect and Hoskinson also circulated a fact sheet stating that “relevant authorities and law enforcement are being notified” in relation to the event.

IOG Developer Resigns Over Concerns About Legal Risks

The situation sparked unease within the development community itself.

An IOG employee using the handle “effectfully,” identified as Roman, a Plutus developer, announced his resignation following Hoskinson’s statements.

He admitted he had previously made mistakes during simulated cyberattacks and feared that similar errors in the future could lead to legal trouble.

“I didn’t realise there was a risk of getting raided by the authorities because of that and saying mean things on the Internet. [...] For context, most vulnerabilities in the computational layer were either directly discovered by me or originated from my ideas.”

Trust, Testing and Accountability in a High-Stakes Ecosystem

From Coinlive’s perspective, this incident highlights a growing tension in decentralised systems: the balance between open experimentation and real-world consequences.

While Cardano recovered technically, the human and reputational impact is harder to patch.

The episode raises vital questions about responsibility in blockchain research, the expanding role of AI in code experimentation, and how far legal action should extend in open-source environments.

For the wider market, it is not just a momentary failure, but a prompt to rethink safeguards before innovation outpaces understanding.