Cardano saw a significant decline last week, with the cryptocurrency losing over 19% of its value in seven days. The blockchain network is also facing serious issues. Last Friday, a software error caused by an unusual transaction occurred. Cardano founder Charles Hoskinson has since involved the FBI for an investigation.
Cardano experienced a so-called ‘chain-split,’ meaning the blockchain temporarily split into two different versions. The culprit was an ‘incorrectly formed’ delegation transaction intended to delegate ADA to a staking pool. However, this went completely wrong.
How did this problem occur on the Cardano blockchain? #
The problem arose because this technically valid but unusual transaction triggered a software bug that disrupted the network’s operation. The ‘malformed’ transaction encountered an old bug in Cardano’s software library and exploited it. This caused nodes, the computers running the blockchain, to become confused. The nodes no longer knew how to process the transaction, ultimately leading to a split in the Cardano network. Staking pool operators, who run Cardano nodes, quickly installed the latest software update. This allowed the two split versions of the blockchain to be merged back into a single, consistent version. The ‘malformed transaction’ was traced to staking pool operator Homer J, who used AI-generated code to send it. This turned out to be a bad decision. The staking pool operator has since acknowledged that his action caused the chain-split.
Concerns within the Cardano community #
The network outage on the blockchain is a source of concern within the Cardano community. Users fear ‘orphaned transactions’ and ‘double spends’ with ADA, Cardano’s token. This means they are worried that transactions might simply ‘disappear’ or be executed twice. If this happens, users could lose their ADA tokens. However, not everyone is fearful and negative after this incident. According to some ADA investors, the staking pool operator who made the mistake has exposed an important bug.
Response from Cardano founder in video #
Cardano founder Charles Hoskinson disagrees. He views Homer J’s action as a direct attack on the network. In many jurisdictions, this is a very serious crime. ‘It’s tampering with and causing damage to a digital network,’ he said in a video. Hoskinson is clearly not pleased with the situation, as seen in the video. ‘It’s tampering with and causing damage to a digital network. Maybe they thought it was funny, like: look, we’re kicking Charles’s toy,’ said the Cardano chief. And he continued: ‘But these kinds of things affect the lives, money, and trade of millions of people. It’s like trying to shut down an economy and launching a cyberattack on a nation-state.’ Watch the video here:
Update https://t.co/48YGQbF05R — Charles Hoskinson (@IOHK_Charles) November 21, 2025
Cardano price barely reacts #
Notably, the Cardano price barely reacted to the outage. ADA fell last Friday from $0.44 to $0.40. According to this user on ‘X’, there is a clear reason for that:
Cardano mainnet is down and nobody has noticed yet because nobody uses it pic.twitter.com/syLDMzLR7f — wab.eth (@wabdoteth) November 21, 2025