Key points

• Zano restarted the chain from block height 3,833,000, just before Hard Fork 6, wiping about one month of history.
• The team said an inflation bug in Gateway Addresses allowed unauthorised issuance of ZANO and the fUSD stablecoin.
• Zano said wallet spend keys and ordinary transaction privacy were not compromised and core consensus was unaffected.
• Freedom Dollar paused fUSD activity and said it would absorb several million dollars of losses from counterfeit fUSD.
• Nodes, miners, stakers and services must adopt the update, and some users said losses were socialised across the chain.

Zano has restarted its blockchain from block height 3,833,000 to fix an inflation bug, erasing roughly a month of transaction history. The Zano team said in a Sunday statement that the rollback was needed to halt unauthorised issuance of ZANO, the chain's native token, and fUSD, a dollar-pegged stablecoin issued on the network. The measure follows Hard Fork 6 and is described as unprecedented in crypto.

According to the team, the problem lay in Gateway Addresses, which allowed tokens to be issued without authorisation. Zano said it found no compromise of wallet spend keys or of ordinary transaction privacy, and that the core consensus protocol was unaffected. The team had earlier said the fix would involve a one-day rollback, but the approved plan covered a full month of history.

In its statement, the team said the chain had been restarted from block height 3,833,000, immediately before Hard Fork 6, affecting about one month of chain history. It added that recovery requires participating nodes, miners, stakers and services to adopt the update. Every transaction confirmed during that period will not form part of the recovered chain.

Chain restarted at block 3,833,000

Zano said it is working with affected counterparties to account for losses, and noted that the rollback cannot affect payments settled on other networks. The Freedom Dollar team acknowledged that several million dollars' worth of assets it held were exchanged for counterfeit fUSD, and said the project would absorb the losses itself. It told fUSD holders to pause all economic activity involving token transactions until the patched chain is confirmed stable.

Freedom Dollar said it would set out the conditions for resuming fUSD services and provide a clear route for a full resumption of economic activity around fUSD and the Zano blockchain. The announcement drew a mixed reaction from users, some of whom said the solution was complex and effectively socialised the losses of affected parties across everyone who used the Zano chain during the past month.

The episode highlights the difficulty of reversing token issuance on a live network. A rollback of this length discards legitimate transactions alongside the fraudulent ones, which is why such steps are rare. Zano's approach places the cost on users and services that transacted during the affected window, rather than only on the parties that received the unauthorised tokens.

Freedom Dollar absorbs losses

Zano is also preparing a separate overhaul of its consensus design. The outlet reports that the project plans to replace its hybrid proof-of-work and proof-of-stake system with Zenith, a privacy-preserving pure proof-of-stake protocol, in 2027.

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