Zano Rolls Back One Month of Blockchain History Following Critical Gateway Address Exploit

The Zano core team has executed a drastic network rollback, erasing approximately one month of blockchain history after a severe vulnerability compromised the platform. The security flaw involved a newly introduced feature known as Gateway Addresses, which allowed unauthorized quantities of both native ZANO tokens and Freedom Dollar (fUSD) assets to enter circulation without restriction.

According to official updates from the development team, the Zano blockchain has been successfully restarted at block 3,833,000. This specific checkpoint immediately precedes Hard Fork 6, the network upgrade that originally deployed the flawed Gateway Address feature. To complete the recovery process, the development team has called upon all participating network stakeholders—including nodes, miners, stakers, cryptocurrency exchanges, and various integrated third-party services—to adopt the emergency software update and synchronize with the restored chain.

Quinten van Welzen, Zano’s head of marketing and growth, addressed the severity of the situation in statements to Cointelegraph, noting that the volume of unlawfully minted tokens was substantial. By choosing to reset the ledger, the project has effectively invalidated an entire month of transactions. Consequently, all legitimate transfers, trades, and interactions executed during this window will no longer appear on the recovered blockchain. Furthermore, the rollback cannot retroactively reverse payments or settlements that have already cleared on external blockchains or independent platforms. To mitigate collateral damage, the Zano team has confirmed that it is actively working to account for all user losses and intends to publish a formal reimbursement and claims process for affected participants.

Defending the controversial decision to roll back the network, van Welzen emphasized that inaction would have posed an existential threat to the project. Allowing the exploit to stand would have permanently injected an unlimited supply of unauthorized ZANO and fUSD tokens into the ecosystem, severely diluting the holdings of every legitimate investor and violating the fundamental economic principle of a fixed supply. In an extensive post on the social media platform X, van Welzen articulated the stakes of the decision, pointing out that failing to act would signal to malicious actors that exploited digital assets retain their long-term value, a precedent no decentralized project can survive.

Zano Identifies Gateway Address Exploit

While the Zano core team has yet to publish a comprehensive post-mortem analysis detailing the precise mechanics of the exploit, they have officially confirmed that the vulnerability originated within the Gateway Address mechanism. This feature was originally conceived to streamline integration for external bridges, centralized and decentralized cryptocurrency exchanges, and payment processing services. By allowing these platforms to manage user funds through a single, account-style balance similar to those found on account-based blockchains like Ethereum, Gateway Addresses aimed to simplify complex development workflows.

Before the implementation of Gateway Addresses, Zano’s traditional wallets handled funds via Unspent Transaction Outputs, commonly referred to as UTXOs, rather than maintaining a unified account balance. Under the traditional UTXO model, exchanges and third-party integration partners were required to continuously scan the blockchain to identify incoming payments, meticulously track individual transaction outputs, and selectively designate which specific outputs to spend when fulfilling customer withdrawal requests. The introduction of Gateway Addresses sought to bypass this architectural friction, but the unforeseen vulnerability ultimately forced the team to pull the feature entirely.

Speaking further with Cointelegraph, van Welzen confirmed that all active Gateway Addresses have been rendered inactive on the newly restarted chain. These addresses will not be restored until the underlying code undergoes rigorous review, independent security audits, and extensive testing.

Originally launched in May 2019, Zano was engineered as a privacy-centric layer-1 blockchain designed to facilitate confidential peer-to-peer payments. The network’s core architecture utilizes sophisticated cryptographic protocols to conceal senders, receivers, transferred amounts, and specific asset types from public view. Beyond its native cryptocurrency, ZANO, the blockchain protocol features a flexible asset issuance framework that empowers users and developers to mint custom digital tokens. Freedom Dollar, commonly known as fUSD, functions as one of these prominent custom assets operating natively within the Zano ecosystem.

Acknowledging the heavy toll the emergency measure takes on the community, van Welzen expressed remorse for the lost history and diminished confidence, noting that the team faces a significant challenge in rebuilding trust. However, he maintained that resetting the ledger was the only viable path forward to preserve the foundational economics of the network. He stressed that while restarting the chain from a pre-fork state sacrifices a month of progress and hurts the community deeply, allowing the compromised supply to persist would have effectively terminated seven years of continuous development and hard work.

The Zano team continues to coordinate with exchanges, node operators, and ecosystem partners to ensure a smooth transition to the recovered network as they prepare further updates regarding user compensation and future protocol deployments.