While the crypto industry attempts to recover from a harsh crash, other problems are arising. In an atmosphere already saturated with volatility, it is Cardano, renowned for its stability, whose network has fractured. A bug several years old, a malformed transaction, an operator a bit too curious—and suddenly, the protocol wobbles. No thefts, no loss of funds, but an already tense climate of trust cracks even more. This was a narrowly avoided earthquake.
In brief
- •A malformed transaction triggered a temporary split on the Cardano blockchain.
- •The error stems from a 2022 bug exploited by an operator using AI.
- •The ecosystem reacted quickly with an urgent update, merging the chains into one.
- •The incident has led to criticism regarding the protocol’s robustness and project governance.
Cardano Split and Bug: The Narrowly Avoided Crash
On November 21, 2025, the Cardano blockchain experienced a chain split caused by a malformed transaction. Behind this flaw was a discreet bug, hidden in the code since 2022, which was awakened by a staking operator using AI-generated code.
Sorry (I know that word isn’t enough given the impact of my actions) Cardano community, I endangered the network through my negligence last night. It was initially a personal challenge like “let’s see if I can reproduce the bad transaction,” and I was quite foolish…
Homer J, the individual responsible, did not shy away from admitting fault: “Sorry (I know that word isn’t enough given the impact of my actions) Cardano community, I endangered the network through my negligence last night. It was initially a personal challenge like ‘let’s see if I can reproduce the bad transaction,’ and I was quite foolish…”
The result was the formation of two chains. One contained the “poisoned” transaction, while the other did not. Miners continued producing blocks on both chains, but only one could ultimately survive.
Voices within the community quickly denounced the incident as an attack. Charles Hoskinson, founder of Cardano, was direct in his assessment:
This was a premeditated attack carried out by a disgruntled SPO who spent months on the Fake Fred Discord actively looking for ways to harm the IOHK brand and reputation. He targeted my personal pool, causing disruption across the entire Cardano network. Every user was impacted. SPOs lost rewards. There could have been double spends. DeFi was disrupted.
Crypto & Chaos: When Human Error Shakes a Network
Using AI to interact with a blockchain is not inherently problematic, but it demands rigor. In this specific case, it was human carelessness that amplified the issue. Homer J admitted to relying on AI model suggestions without proper verification or testing. He claims there was no malice, only negligence that had concrete consequences.
This is not an isolated incident in the crypto world. Bitcoin experienced a similar event in 2013 when a bug between client versions 0.7 and 0.8 caused a temporary hard fork, leading to lost blocks and rewards. Ethereum, meanwhile, saw the emergence of Ethereum Classic following the The DAO hack in 2016.
Andrew Throuvalas, an observer of the space, summarized the situation:
Cardano indeed crashed for the first time. Apparently, a hacker caused a network partition by exploiting a bug present in an older version of Cardano’s software. This created two chains. Blocks were produced on both sides, but one will eventually outpace the other, orphaning blocks from the malicious chain.
The lesson is clear: even the most well-designed chains can falter. The objective is not infallibility, but rather the capacity to react, repair, and learn.
Flaws Under the Rug: What the Cardano Incident Reveals
Fortunately, the Cardano network did not halt. Blocks continued to be produced. Operators were promptly called upon to update their nodes to version 10.5.3. This version rejects the faulty transaction and reunites the two chains into one. A working group was also established for data reconciliation.
However, these measures do not entirely erase doubt. A portion of the community is questioning: if such an old bug was exploitable, what about others? Krumlar, an active user, articulated this concern effectively:
You’re not a bad person. Stop this nonsense. You want to know what’s really bad? The fragile nature of Cardano, if you can break it so easily.
Cardano's reputation is built on scientific rigor and its formal approach. Yet, this incident highlights a governance flaw. Who approves patches? Who conducts thorough testing? The ecosystem, though solid, has demonstrated its vulnerability to human error, even when accidental.
To Remember – Facts and Figures
- •The price of ADA, Cardano’s native token, is currently trading around 0.40 dollars;
- •The bug dates back to 2022 but was only recently exploited;
- •Two distinct chains temporarily coexisted on November 21, 2025;
- •The node patch version is 10.5.3;
- •The author of the flaw used AI-generated code without testing it on a testnet.
What comes next? Cardano is relying on the Ouroboros Phalanx update to strengthen its security and prevent similar incidents. This is a necessary response, but not entirely sufficient. Because while the technology is solid, it is trust that will need to be rebuilt moving forward.