Cardano experienced a temporary chain split after a malformed transaction exposed a software flaw

Cardano’s blockchain faced an unexpected chain split after a malformed delegation transaction activated an overlooked flaw in the network’s node software at around 8 AM UTC Friday.

According to a report from Cardano’s governance organization, Intersect, the validation mismatch caused parts of the ecosystem to diverge briefly. However, developers shut down claims that it brought down the whole network and insist that block production continued as normal.

“During the recent network incident, block production never stopped, the chain never went offline, and the protocol kept running. Please stop spreading misinformation,” said one staking pool operator on X.

Malformed transaction triggers split, hard fork applied

In an incident report, Intersect said that the problem started when a faulty delegation transaction was able to pass validation on newer node versions. Older versions rejected the same input, which led to two chains that started making blocks on their own.

“This exploited a bug in an underlying software library that was not trapped by validation code,” Intersect wrote. The governance group said this mismatch allowed the faulty transaction to enter one branch of the ledger, while nodes running outdated software refused it, splitting the network.

Cardano co-founder Charles Hoskinson shared his perspective on X shortly after the divergence was detected, saying it was caused by a “premeditated attack from a disgruntled stake pool operator actively looking at ways to harm the brand and reputation of Input/Output Global.”

Hoskinson confirmed that the chain responded quickly and that developers identified the wallet connected to the malformed transaction within the same day. 

“Cardano works so fast that we forked, fixed, and caught the guy all in one day. He was quite active in the Fake Fred discord. It was absolutely personal, and now he’s trying to walk it back because he knows the FBI is already involved. 

According to the entrepreneur turned blockchain developer, every single user was impacted, and SPOs lost block rewards because there were “double spends.” 

“It will take weeks to clean up this mess and even longer for the brand and reputation damage to be repaired. He apologized because the ITN pool in my video earlier linked to him and he knew a criminal investigation had already been launched,” Hoskinson wrote in a reply to one community member.

Intersect said the wallet behind the malformed transaction was owned by a participant from the Incentivized Testnet (ITN) era. It added that “relevant authorities” like the Federal Bureau of Investigation were asked to investigate.

Markus, the operator behind the Cliopool staking pool, said the faulty branch expanded faster because it accumulated more stake weight early in the process. According to him, “the bad chain had more stake and grew much faster than the one without the malicious transaction.”

SPO claims responsibility for network mishap

An X user going by the tag Homer J. had claimed they submitted the transaction that triggered the split while trying to find out if the network “can produce a bad transaction.” They apologized publicly, writing: “Sorry Cardano folks, it was me who endangered the network with my careless action yesterday evening.”

The user said they relied on AI-generated instructions while blocking traffic on their server, not realizing the consequences of the test. Homer pleaded with Cardano devs, asserting that they finally realized the scale of problems caused due to their “curiosity.”

“I know there’s nothing I can do to make up for all the pain and stress I’ve caused over the past X hours. Difficult to quantify the negligence on my behalf. I am sorry, I truly am. I didn’t have evil intentions.”

Hoskinson addressed the community again in a recorded interview, praising the network for surviving and not stopping. 

“Ultimately the attack failed…If you are an SPO, please install 10.5.3. It is imperative that you do so, and we’ll just push it through, and the two networks will become one soon, and we can get back to business.”

Reacting to the network’s block validation hiccup, ADA has dropped by over 5.9% in the last 24 hours to trade at $0.4013.

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