ADA fell 16% after a sudden chain split on the Cardano network triggered by an AI-generated transaction, exposing a hidden vulnerability and forcing a fast, coordinated response from the community. Federal authorities have opened an investigation as emergency patches work to bring the network back to a single canonical chain.
Cardano Responds to an AI-Triggered Chain Split
A staking pool operator known as “Homer J” executed an AI-generated script that exploited a deserialization bug dormant since 2022. The malformed transaction created two competing versions of the chain—one “poisoned” by the malicious payload and another “healthy”, accepted by nodes that maintained protocol integrity.
Cardano’s Ouroboros Proof-of-Stake architecture enabled a rapid, united response from operators, developers, and governance groups including Intersect, IOG, the Cardano Foundation and EMURGO. Emergency node updates 10.5.2 and 10.5.3 were pushed out quickly, helping the network converge on a single chain. No user funds were lost once block production normalized.
The market reacted sharply, with ADA dropping 16%, though later reports pointed to a smaller move—from $0.44 to $0.40 depending on the chart. Major exchanges such as Coinbase, Kraken and Upbit temporarily paused ADA deposits and withdrawals to contain operational risk.
Charles Hoskinson labeled the incident a “premeditated attack” and a felony, reporting it to authorities. The U.S. federal prosecutor’s office has opened an investigation, and early forensic analysis links the attacker to participants from the Incentivized Testnet era—suggesting the exploit may have been intentional rather than accidental.
The episode has renewed debate about Proof-of-Stake security, highlighting how AI-generated exploits could introduce new attack vectors. Even so, many observers pointed to the speed and coordination of Cardano’s recovery as evidence of the network’s operational resilience, with developers from other L1s acknowledging the strength of its design.
Ultimately, the chain split and ADA drop underscore the need to reinforce protections against AI-based automated attacks, even as Cardano’s recovery demonstrated the system’s capacity to withstand and resolve complex disruptions.
