Compass Investments

– Cardano’s ADA token exchange rate plummeted on Friday after the blockchain experienced a rare and serious glitch – a chain split triggered by an incorrectly formed delegation operation.

The incident briefly split the network into two conflicting registry variants, caused confusion among exchanges and service providers, and prompted the FBI to launch an investigation, which Cardano developers characterized as a possible cyberattack.

Following the chain split, ADA fell 16% before settling at $0.41.

The asset has lost more than 30% in value over the past two weeks as investors await more information from investigative agencies and the core team.

According to the information released by Intersect (the governing body of the Cardano ecosystem), the difficulty arose from a single transaction created with AI-generated instructions that was tested on the newest versions of nodes but rejected by older ones.

Cardano experienced a temporary chain break today after an incorrect transaction caused a glitch in the underlying software library.

The discrepancy caused nodes to start forming blocks on different branches of the blockchain, essentially splitting Cardano into two chains: one with the unwanted or “infected” transaction and one without.

The developers noted that the malicious transaction exploited a long-standing vulnerability in the underlying software that had gone undetected.

The divergence echoed a similar issue identified on the Cardano test network just a day earlier, reinforcing suspicions of pre-testing the exploit before applying it to the main network.

Intersect reported that block mining continued on both chains, but the split disrupted wallets, blockchain observers and some DeFi protocols.

Transaction confirmations slowed or stopped while the network tried to repair the split, forcing major exchanges including Coinbase, Upbit and Kraken to suspend ADA deposits and withdrawals until consensus was restored.

The failure drew a lot of attention because the complete chain split is atypical for Cardano, which has not experienced such incidents in eight years of operation.

User funds were not affected, but the event raised concerns about possible lost transactions and isolated cases of double spending.

Cardano co-founder Charles Hoskinson characterized the incident as a deliberate attack by a disgruntled steaking pool operator, saying that the user allegedly spent months looking for ways to undermine the reputation of Input Output Global (IOG), the company responsible for developing Cardano.

hours after the network split, a certain X account under the pseudonym “Homer J” released a statement claiming responsibility for the erroneous transaction that caused the incident.