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Crypto Founder Defends FBI Involvement After Developer Accidentally Causes Blockchain Split

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on friday, Cardano’s mainnet experiences a significant chain split A vulnerability in the network’s node software was exploited after a single malformed delegation transaction. The issue stems from a deserialization bug that has existed since 2022, allowing transactions to pass verification on new nodes if they are rejected by older nodes. This created two incompatible ledger states, causing the $14 billion blockchain to be split into parallel chains.

According to an incident report from Cardano ecosystem organization IntersectBlock production continued uninterrupted on both chains, and some transactions appeared identical on them. However, the split led to disruption in decentralized finance (DeFi) protocols, conflicting data on block explorers, and less reliable transaction confirmations.

Major exchanges reacted by blocking ADA deposits and withdrawals. Coinbase suspended operations for approximately 14 hours. Other platforms including Upbit and Kraken implemented shorter pauses.

The native Cardano cryptocurrency, ADA, fell to $0.35 before reaching around $0.42 by Sunday.

The development teams at Input Output Global (IOG), the Cardano Foundation, Intersect, and eMurgo immediately formed an emergency response group. They deployed the patch within three hours, and the network achieved consensus around a single blockchain after the node update.

Hours after the split, X user “Homer J” claimed responsibilityDescribed the incident as a “reckless” personal experiment. In a public apology, Homer Jay explained that he had attempted to replicate a testnet issue, but had relied on untested AI-generated instructions, without first verifying on the testnet, to isolate his servers. He wrote, “I am ashamed of my negligence and take full responsibility.”

However, Cardano co-founder Charles Hoskinson, who was also a co-founder of Ethereum, described the incident As a “premeditated attack” by a disgruntled stake pool operator. In the X Post, he said the actions were “absolutely personal” and confirmed that the FBI had been informed, citing the network’s constitution as a user agreement that obliges it to report such disruptions.

The decision to involve federal officials generated immediate reaction within the development community. Roman Kireev, a senior Plutus language developer at IOG, announced his resignation On Monday. Kireev, who has contributed to several of Cardano’s computational layer security improvements, expressed concern over potential legal risks for routine testing errors. “I didn’t realize there was a risk of being raided by the authorities for saying nasty things on the internet,” he posted.

Kireev also noted that most of the vulnerabilities in the computational layer originated from his discoveries or ideas and indicated that he would continue to contribute to the ecosystem independently.

Hoskinson defended the FBI referral, arguing that it was necessary to protect users’ assets under the terms of the network. He dismissed Kireev’s concerns as “complete nonsense and ridiculous”, writing, “It is our duty to file a complaint and let them investigate.”

The illusion of decentralization in crypto

The Cardano chain split has highlighted a persistent tension in the crypto sector: the gap between declared decentralization and the centralized backstop that inevitably comes to the fore during crises. For all the rhetoric surrounding “trustless” crypto networks, projects often depend on the coordinated intervention of a handful of major entities to restore order. Cardano’s rapid patch deployment, while effective, highlights the fragility of this hybrid approach, where a single point of failure could expose the network’s dependence on a core group of maintainers.

In other words, it is difficult for crypto projects to claim decentralization when developers have so much influence over the relevant node software. The centralized influence of developers on the crypto network was perhaps most notably demonstrated in Ethereum’s response to the DAO hack, when the node implementation Updated to support a fork to reverse the hack by default And exchanges were told by the Ethereum Foundation not to worry about supporting a version of the blockchain that does not enforce reallocation of funds away from the hacker.

Even Bitcoin has dealt with emergency situations through centralized methods, such as Effect of inflation And an accidental series divisionIn earlier days.

The developers behind Bitcoin Core try to avoid centralization practices Such as automatic updates and hard forks, and the potential risks associated with updating node software more generally are a major justification used by those who advocate complete ossification of the Bitcoin protocol.

Cardano does Plan Improving the decentralization of its development process and placing it in the hands of ADA holders rather than founding entities like IOG. But it’s worth noting that governance through tokens is another common method of decentralization theater often used in crypto, According to a recent report in the case of crypto network TRON,

There is also a broader industry desire to blend the benefits of centralized systems, such as reliability and ease of use, with the ideological appeal of decentralization. But true decentralization imposes strict trade-offs: users take full custody and responsibility for their assets, with no central authority to intervene if things go awry.

There have been massive power cuts in the last few weeks On cloud providers like AWS This cascaded into downtime for many crypto platforms, revealing how much the ecosystem depends on traditional infrastructure giants. and there exists now A More Permissive Crypto Regulatory Landscape Under the Trump AdministrationWhich further encourages the use of decentralization theater as a means to an end. In this environment, Blockchains are increasingly serving as a revenue source for centralized fintech companiesBypassed stringent AML/KYC requirements while charging fees from user activity.

Much of crypto’s infrastructure revolves around this dynamic, particularly stablecoins, which have inherited much of the centralization of traditional banking apps, despite claims that they are some kind of crypto innovation. With many leading applications built on top of these centralized digital currencies, The region finds itself increasingly divided Between philosophical cyberpunks advocating uncompromising sovereignty and growth-oriented developers pursuing user adoption and profits.





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