ADA Plunges 16% Amid AI-Generated Transaction Chaos — FBI Launches Cardano Investigation

Cardano's blockchain faces unprecedented turmoil as artificial intelligence manipulates transaction flows, triggering massive sell-offs and regulatory scrutiny.

Digital Storm Hits ADA

The cryptocurrency market watched in disbelief as ADA collapsed 16% in a single trading session. Behind the crash? Sophisticated AI algorithms that split and manipulated Cardano transactions across the network, creating artificial volume and confusion among traders.

FBI Enters Crypto Arena

Federal investigators have officially opened a probe into the AI-generated transaction patterns, marking one of the first major federal interventions in blockchain manipulation cases. The investigation focuses on identifying the source of the algorithmic attacks and potential market manipulation tactics.

Market Confidence Shaken

Traders scrambled to reassess positions as the AI-driven chaos revealed vulnerabilities in even the most established blockchain networks. The incident serves as another reminder that in crypto, sometimes the biggest threat isn't regulation—it's the machines we built to trade faster than humans ever could.

Cardano Chain Split Forces Coinbase, Kraken, Upbit to Pause ADA Deposits and Withdrawals

According to incident details published by Intersect, Cardano’s ecosystem governance body, the problem began when a single delegation transaction, created with AI-generated instructions, passed validation on newer node versions but was rejected by older ones.

Mainnet Incident Update

Cardano experienced a temporary chain partition today after a malformed transaction triggered a bug in an underlying software library.

The ecosystem moved fast in a coordinated response. Upgrades to node version 10.5.2/10.5.3 are restoring full…

That mismatch caused nodes to build blocks on different branches of the blockchain and effectively split cardano into two chains: one containing the malformed, or “poisoned,” transaction, and another without it.

Developers said the malformed transaction exploited a long-standing bug in a CORE software library that had gone undetected.

The divergence echoed a similar issue seen on Cardano’s testnet just a day earlier, reinforcing suspicions that the exploit had been tested before being pushed to mainnet.

Intersect said block production continued on both chains, but the split disrupted wallet services, block explorers, and some DeFi protocols.

Transaction confirmations slowed or failed as the network sought to resolve the split, prompting major exchanges, including Coinbase, Upbit, and Kraken, to pause ADA deposits and withdrawals until consensus was verified.

The disruption drew attention because full chain splits are unusual for Cardano, which has operated for eight years without a comparable incident.

No user funds were lost, but the event raised concerns about potential orphaned transactions and isolated double-spend.

Update https://t.co/48YGQbF05R

Cardano co-founder Charles Hoskinson described the event as a deliberate attack from a disgruntled stake pool operator, claiming the user had spent months searching for ways to damage the reputation of Input Output Global (IOG), the company behind Cardano’s development.

Cardano Developers Rush Out Patch After Chain Split, Attacker Calls It a Mistake

A few hours after the network split, an X account operating under the name “Homer J” stepped forward and said they were responsible for the faulty transaction that set off the incident.

According to their post, the user had been experimenting on their own system, trying to replicate what they described as a problematic transaction.

Sorry (I know the word isn't enough given the impact of my actions) Cardano folks, it was me who endangered the network with my careless action yesterday evening. It started off as a "let's see if I can reproduce the bad transaction" personal challenge and then I was dumb enough

They said the attempt was based on instructions generated by an AI tool and carried out while they intentionally blocked network traffic on their server.

They claimed they acted alone, did not profit, and did not intend to cause financial damage.

Cardano founder Charles Hoskinson dismissed the explanation, calling the event a deliberate attack and confirming that the FBI had been alerted.

Cardano works so fast that we forked, fixed, and caught the guy all in one day. He was quite active in the Fake Fred discord. It was absolutely personal and now he's trying to walk it back because he knows the FBI is already involved https://t.co/MNK6d7bEWv

Intersect later said its forensic review suggested possible ties to a participant from Cardano’s old Incentivized Testnet and that U.S. federal authorities were now involved.

Engineers from IOG, Intersect, the Cardano Foundation, and EMURGO coordinated a patch within three hours, advising stake pool operators to upgrade their nodes so the chain could realign.

Whenever something unexpected happens, the usual rumours and hot takes start flying. Let’s ground everything in clear facts instead of noise.

Yes, this was a serious incident. But the network demonstrated its resilience, stayed online, and the ecosystem responded with speed and… pic.twitter.com/iGc1MUn53a

By Nov. 22, consensus had naturally re-formed, and major exchanges began restoring ADA services. Coinbase recorded the longest downtime, suspending ADA transfers for roughly 14 hours.

The disruption drew comparisons to past chain splits in crypto, including Bitcoin’s 2013 fork caused by node-version incompatibilities.