Hoskinson Praises Cardano Resilience After Cyberattack Impacts All Users

Cardano’s blockchain demonstrated robust resilience against a cyberattack that split its network and affected all users, preventing a total collapse and avoiding direct fund losses.

Founder Charles Hoskinson lauded the network’s performance, stating it “did not go down” despite the “poisoned transaction” assault. He praised the quick response from engineers.

The incident, occurring last Friday, caused a validation failure after a malformed transaction exploited an error in an underlying software library. This led to the network diverging into two parallel chains: one containing the defective transaction and a “healthy” one without it.

“All Cardano users were impacted,” Hoskinson acknowledged in an X post. He emphasized that engineers “were able to stop and track the attacker” in less than 24 hours.

Teams from Input Output Global (IOG), Cardano Foundation, and Intersect convened to deploy a patch within hours. They recommended that operators update their software to version 10.5.2 to resolve the issue.

While no user funds were lost directly, the attack caused significant operational disruptions. Transactions and staking delegations were temporarily interrupted, particularly in affected pools like Hoskinson’s personal RATS pool.

Major exchanges, including Binance and Coinbase, paused deposits and withdrawals as a precautionary measure, limiting liquidity for token holders. Most retail wallets, like Daedalus and Yoroi, were not directly impacted. However, all users experienced general network congestion and slowdowns.

The price of ADA, Cardano’s native token, initially plunged over 6% immediately after the incident. By Saturday morning, it showed a modest 1.5% recovery, trading around $0.398. However, ADA still accumulated a loss exceeding 20% for the week.

Hoskinson initially described the event as a “premeditated attack by a disgruntled stake pool operator.” He later clarified that the responsible party, identified as X user “KpunToN00b,” admitted to accidental negligence.

“I’m sorry, Cardano people, it was me who put the network at risk with my reckless action last night,” KpunToN00b posted publicly. Hoskinson noted the attacker’s planning had lasted for months.

Despite the apology, the case has escalated into a criminal investigation by the FBI. Authorities are classifying it as a potential cyberattack.

Hoskinson warned that a complete network cleanup could take several weeks. This especially applies to validators who may have lost block rewards due to the disruption.

The incident highlights vulnerabilities in mature blockchain ecosystems. It also underscores their capacity for self-correction. The network’s swift resolution comes ahead of the Midnight NIGHT token launch scheduled for December 8.

The investigation continues. The Cardano community looks towards preventative improvements, supported by Hoskinson’s leadership.