Zano announced a full blockchain rollback to block 3,833,000, effectively deleting about a month of data after a security weakness in its Gateway Address system permitted the unlimited minting of ZANO and the Freedom Dollar (fUSD) token.
What triggered the rollback
The core team traced the issue to the recently introduced Gateway Addresses, a mechanism meant to simplify integration for bridges, exchanges and payment services by consolidating funds into a single account-style balance. Prior to this feature, Zano relied on a UTXO model where each transaction output was tracked individually. The new design inadvertently opened a path for attackers to generate unauthorized tokens, threatening the fixed-supply promise of the network.
Technical details of the reset
To eradicate the illicit tokens, Zano restarted its chain just before Hard Fork 6, which had introduced the vulnerable feature. The rollback resets the ledger to block 3,833,000, nullifying all transactions that occurred after that point on the Zano chain. While the reversal removes the counterfeit tokens from Zano’s own ledger, it cannot undo any cross-chain settlements that may have already been completed.
Required actions for the ecosystem
The restoration depends on widespread adoption of the new software version by nodes, miners, stakers, exchanges and any services that interact with the chain. Participants must upgrade to the latest release that excludes the compromised Gateway Address code and re-synchronize with the restored history.
Compensation and future safeguards
Zano’s head of marketing and growth, Quinten van Welzen, emphasized that the project will publish a reimbursement and claims procedure to address any losses incurred during the compromised period. He noted that inaction would have allowed the unauthorized supply to persist, eroding holder value and signaling that attackers could keep illicit gains.
Why it matters
The incident underscores the risks associated with rapid feature deployment on privacy-focused blockchains. By choosing to roll back rather than patch, Zano demonstrates a willingness to prioritize economic integrity over continuity, setting a precedent for how emerging networks might handle similar breaches. The episode also highlights the importance of rigorous security audits for new account-based mechanisms, especially when they intersect with cross-chain bridges and exchange integrations.
Why it matters
Restoring the fixed supply is essential for maintaining trust among Zano’s community and investors. The rollback not only removes fraudulent tokens but also forces the ecosystem to adopt stronger safeguards, potentially influencing how other privacy-oriented platforms design and audit future upgrades.
