The Cardano network encountered a temporary chain split on Friday caused by a “malformed” delegation transaction that aimed to delegate ADA to a staking pool. While valid at the protocol level, this type of transaction initiated code malfunctions affecting the network’s performance.

This flaw exploited an existing bug in the underlying software library of the Cardano blockchain, leading to a network partition due to differences in transaction processing by various nodes, as stated in a report by the Cardano ecosystem organization, Intersect.

Staking pool operators were advised to update their node software to resolve this issue and unify the split chain into a single history.

However, this incident has raised concerns about orphaned transactions and the potential for double-spending of ADA, resulting in economic losses for some users.

The split was triggered by staking pool operator Homer J, who deployed AI-generated code to send the transaction and has since accepted accountability for the network partition.

This situation has sparked a heated debate in the Cardano community. Some members argue that Homer J’s actions revealed critical flaws, while others, including Charles Hoskinson, the founder of Cardano, termed it as an attack on the network.

In the aftermath, the FBI has become involved, with Hoskinson mentioning that the agency is investigating the incident. He noted:

“This kicked a hornet’s nest, and in many jurisdictions, this is a felony — a very serious one. It’s tampering with and damaging a digital network.”

He warned that such disruptions could severely impact the lives and finances of countless individuals, comparing them to attempts to sabotage an entire economy.

Despite this significant event, the price of ADA only experienced a modest drop from $0.44 to around $0.40 following the incident, amid a broader downturn in the cryptocurrency market. Critics pointed out that the lack of attention to Cardano’s network troubles was indicative of its low user engagement.