Dispute between Cardano Founder and Foundation Leads to Division within Network
On November 21, 2025, Cardano (ADA) experienced a brief yet notable chain split due to the exploitation of a longstanding code flaw using a deliberately malformed delegation transaction. This incident resulted in a temporary division within the network, which was promptly addressed by engineers. Following the network’s restoration, founder Charles Hoskinson praised the blockchain’s resilience in the face of adversity.
The disruption was orchestrated by a dissatisfied stake pool operator (SPO) who had been planning the exploit for months. Hoskinson referred to discussions in the Fake Fred Discord group as part of a broader effort to undermine the network’s credibility. The chain split occurred when updated versions of the Cardano node software failed to process the malicious transaction, leading to a fork between different node releases. Despite legacy nodes continuing to validate blocks, the network’s operation slowed down. Stake pool operators swiftly upgraded to version 10.5.3, restoring stability by the end of the day.
Hoskinson reassured users that all funds were secure, and no blocks were lost during the incident, although users experienced inconsistencies and delayed transaction confirmations. This event underscored the risks associated with hidden vulnerabilities in blockchain systems, particularly those that go undetected for extended periods until exploited.
The chain split reignited discussions about Cardano’s governance and internal conflicts. Hoskinson publicly criticized the Cardano Foundation (CF) for its oversight of the community, sparking a dispute with CF community lead Nicolas Cerny over accountability. Cerny defended the foundation’s expanding responsibilities, including its DeFi and real-world applications support, while Hoskinson advocated for organizational changes and new leadership at the CF. These disagreements shed light on ongoing tensions among Cardano’s founding organizations—IOHK, Emurgo, and the CF—regarding governance and strategic priorities.
Furthermore, the incident highlighted the security challenges faced by decentralized networks. While Cardano’s architecture helped mitigate the impact of the attack, the event exposed the potential for targeted disruptions by insiders with specialized knowledge. Analyst CryptoRus attributed the fork to a bug in the latest node software, noting that older nodes preserved the network’s continuity. The attacker’s meticulous planning, informed by familiarity with IOHK’s processes, has led to calls for enhanced security measures and greater community awareness.
As Cardano navigates past the incident, it serves as a cautionary tale for other blockchain projects. Hoskinson’s acknowledgment of the reputational consequences emphasizes the ongoing struggle to maintain trust in decentralized platforms. With ADA priced at $0.458 as of November 22, the community and investors are closely monitoring future governance changes and technical advancements within Cardano.
