Cardano’s founder said initial findings point to Wanchain infrastructure, while audits are underway to determine the affected component, losses and remediation after $NIGHT’s sharp drop.
Charles Hoskinson said a security incident tied to the Midnight ecosystem was confined to third-party bridge infrastructure rather than the Midnight protocol or the $NIGHT smart contract on Cardano. The remarks came after a sharp fall in the $NIGHT token price. Hoskinson said early findings indicate the issue is entirely limited to Wanchain infrastructure, which he said includes four core on-chain and off-chain components operating across Cardano and BNB Chain. He said a full audit is needed to establish which component was compromised and how the vulnerability was exploited, and added that he was awaiting an explanation from the Wanchain team. Hoskinson also warned that attacks of this kind could become more common as artificial intelligence improves information security research, accelerating the discovery and patching of vulnerabilities. He said repeated bridge-related breaches over his 15 years in crypto have weakened consumer confidence and argued for next-generation financial infrastructure. In his description, the $NIGHT project is designed to combine traditional finance safeguards such as regulatory mechanisms, insurance products and asset recovery with crypto features including individual custody and self-sovereign identity (user-controlled digital identity). Hoskinson said the token had started to recover after the selloff and described the episode as Midnight’s first major crisis, adding that the ecosystem had begun to recover.