ADA Crashes 16% as AI-Generated Transaction Splits Cardano — FBI Investigates

Cardano’s ADA token fell sharply on Friday after the blockchain suffered a rare and disruptive chain split triggered by a malformed delegation transaction.

The event briefly fragmented the network into two competing versions of its ledger, sparked confusion across exchanges and service providers, and prompted the FBI to begin investigating what Cardano developers described as a potential cyberattack.

cardanoFollowing the chain split, ADA dropped as much as 16% before stabilizing near $0.41.

The token remains down more than 30% over the past two weeks as investors await further updates from investigators and core developers.

Cardano Chain Split Forces Coinbase, Kraken, Upbit to Pause ADA Deposits and Withdrawals

According to incident details published by Intersect, Cardano’s ecosystem governance body, the problem began when a single delegation transaction, created with AI-generated instructions, passed validation on newer node versions but was rejected by older ones.

That mismatch caused nodes to build blocks on different branches of the blockchain and effectively split Cardano into two chains: one containing the malformed, or “poisoned,” transaction, and another without it.

Developers said the malformed transaction exploited a long-standing bug in a core software library that had gone undetected.

The divergence echoed a similar issue seen on Cardano’s testnet just a day earlier, reinforcing suspicions that the exploit had been tested before being pushed to mainnet.

Intersect said block production continued on both chains, but the split disrupted wallet services, block explorers, and some DeFi protocols.

Transaction confirmations slowed or failed as the network sought to resolve the split, prompting major exchanges, including Coinbase, Upbit, and Kraken, to pause ADA deposits and withdrawals until consensus was verified.

The disruption drew attention because full chain splits are unusual for Cardano, which has operated for eight years without a comparable incident.

No user funds were lost, but the event raised concerns about potential orphaned transactions and isolated double-spend.

Cardano co-founder Charles Hoskinson described the event as a deliberate attack from a disgruntled stake pool operator, claiming the user had spent months searching for ways to damage the reputation of Input Output Global (IOG), the company behind Cardano’s development.

Cardano Developers Rush Out Patch After Chain Split, Attacker Calls It a Mistake

A few hours after the network split, an X account operating under the name “Homer J” stepped forward and said they were responsible for the faulty transaction that set off the incident.

According to their post, the user had been experimenting on their own system, trying to replicate what they described as a problematic transaction.

They said the attempt was based on instructions generated by an AI tool and carried out while they intentionally blocked network traffic on their server.

They claimed they acted alone, did not profit, and did not intend to cause financial damage.

Cardano founder Charles Hoskinson dismissed the explanation, calling the event a deliberate attack and confirming that the FBI had been alerted.

Intersect later said its forensic review suggested possible ties to a participant from Cardano’s old Incentivized Testnet and that U.S. federal authorities were now involved.

Engineers from IOG, Intersect, the Cardano Foundation, and EMURGO coordinated a patch within three hours, advising stake pool operators to upgrade their nodes so the chain could realign.

By Nov. 22, consensus had naturally re-formed, and major exchanges began restoring ADA services. Coinbase recorded the longest downtime, suspending ADA transfers for roughly 14 hours.

The disruption drew comparisons to past chain splits in crypto, including Bitcoin’s 2013 fork caused by node-version incompatibilities.