CORE transfers halted on exchanges as Core DAO prepares emergency fork

Core DAO has begun coordinating an emergency hard fork after a small group of validators obtained CORE rewards above the blockchain’s intended issuance, prompting several exchanges to restrict token transfers.

Core said on Sept. 1 that it had contained the issue and stopped what it described as “malicious validators” from drawing further excess rewards. The network is now working with validators on a permanent fix through a forward upgrade, meaning previously confirmed transactions will remain unchanged.

“Assets remain safe,” Core said, adding that a full technical postmortem would be published after the response is completed.

The project has not disclosed the amount of CORE distributed through the incident, the number of validators involved, how long they were able to obtain the excess rewards, or whether any of the additional tokens reached the market.

Core DAO hard fork will not reverse transactions

Core first disclosed the problem on Monday, when it said a small number of validators were accruing block rewards significantly above the amount intended under the protocol.

At the time, the project said it had identified the root cause and was working on mitigation measures. Core described the problem as limited to reward issuance and said it had not affected network security or custody of user assets.

By Tuesday, the team said the activity had been contained and moved to coordinate the emergency hard fork with its validator set. Core has not published an activation time for the upgrade or disclosed the technical vulnerability that allowed the excess rewards to be claimed.

The distinction between a forward upgrade and a rollback means the planned fork is intended to change the network rules from a specified point without rewriting transactions already recorded on the blockchain.

Mainnet upgrades can require coordination between validators and other network participants because nodes must run compatible software after new protocol rules take effect. As crypto.news previously reported, hard forks on production blockchains can require validators and users to reach agreement around the updated network rules.

Core has not said whether validators will need to install a specific software release before the emergency upgrade or what level of validator participation will be required for the fork.

Exchanges restrict CORE transfers

The reward problem led several centralized exchanges to restrict CORE deposits or withdrawals while the network investigated the incident.

Coinbase paused sends and receives on the Core DAO network, according to its status page. Trading functions remained available, with buys, sells, conversions and fiat transactions unaffected by the network transfer restriction.

South Korean exchanges Bithumb and Coinone suspended CORE deposits and withdrawals, citing security concerns surrounding the network.

Bitget restricted CORE deposits and withdrawals under what it described as wallet maintenance, while LBank suspended deposits in response to project requirements. The exchanges did not attribute losses of customer funds to the Core incident.

Core has maintained that user assets were not affected and said the problem involved the issuance of validator rewards.

The project has yet to disclose whether the exchanges will need to complete technical work related to the hard fork before normal CORE transfers can resume.

Validator rewards remain under scrutiny

The unanswered questions center on the amount of CORE obtained by the validators and the mechanism that allowed them to receive more than the protocol intended.

Core has not said whether the excess rewards represented newly created CORE, rewards that would otherwise have been distributed at a later date, or another accounting problem within the validator reward system.

The project has likewise not disclosed whether any of the validators sold, transferred or otherwise moved the additional CORE after receiving it. Its planned postmortem is expected to provide technical details about the root cause, though Core has not given a publication date.

Validators form part of Core’s network architecture, which combines delegated proof of stake with Bitcoin-linked security. Core has spent the past several years building its network around Bitcoin staking and decentralized finance applications.

In March 2025, Core integrated with Cobo to expand its dual Bitcoin staking service for institutional users in Asia. The arrangement allowed Cobo users to stake Bitcoin and CORE while earning BTC-denominated yields.

At that point, institutions had used Core to stake more than 6,200 BTC, while more than 150 Ethereum Virtual Machine-compatible decentralized applications had been integrated into the ecosystem. Core’s total value locked stood above $525 million when the partnership was announced.

The network had already become one of the largest Bitcoin sidechains by locked value. Earlier data showed Core with $423 million in TVL while 55% of Bitcoin’s hash rate was helping secure the network. Messari data cited at the time showed Core had 23 validators during the second quarter of 2024.

Core’s validator system plays a direct role in distributing CORE rewards. The current incident, however, remains limited in publicly disclosed technical details because the project has not explained which part of that reward process was exploited.

Emergency upgrade follows other recent hard forks

Core’s planned response comes shortly after other blockchain networks used hard forks to modify protocol rules, though the reasons for those upgrades differed.

BNB Chain, for example, activated its Pasteur hard fork on Aug. 25 after scheduling changes to bridge verification, validator authorization and block capacity.

One of the Pasteur changes addressed a cross-chain verification weakness that could allow duplicate validators to be counted when determining whether an approval had reached the required threshold. BNB Chain said it had not identified an exploitation of that flaw or linked it to asset losses before the correction was deployed.

Cardano completed another network upgrade in July when the van Rossem hard fork moved its mainnet to Protocol Version 11 that introduced changes to Plutus costs while preparing the network for its planned Ouroboros Leios architecture.

Core’s emergency upgrade is being coordinated after the reward problem was detected rather than as part of a previously announced protocol development schedule.

The network has said the excess reward activity can no longer continue under the mitigation already put in place. Core has not disclosed the identities of the validators it described as malicious or whether it plans to take further action against them.

Its forthcoming postmortem is expected to address the technical cause of the incident, while the amount of excess CORE issued and whether any of those tokens entered circulation remain undisclosed.