SecondFi stops operations and launches new ZK tool for ADA refunds in three phases

SecondFi has ceased operations and launched a three-phase ADA refund program and a new zero-knowledge proof tool.

Cardano wallet platform SecondFi has released a three-phase roadmap to respond to the security breach that occurred in June 2026. In the incident, hackers stole 16.1 million ADA from 374 user wallets, with a loss of approximately US$2.5 million based on the current price.

SecondFi stopped operations and turned to user refunds

After the incident, SecondFi has permanently terminated all regular services. Project resources are now fully used to extract remaining assets and compensate affected users. To advance this process, the SecondFi team announced a partnership with leading blockchain research and engineering company Input Output Group and the Cardano Foundation. They jointly developed the first Web3 compensation mechanism using zero-knowledge proof to support secure and private claims processing.

After the hack, SecondFi quickly transferred funds to managed storage and successfully protected 129 million ADAs. This pre-emptive move retained significant assets to support subsequent compensation efforts.

Detailed explanation of the three-phase recovery plan

According to the roadmap, the recovery plan is divided into three key stages. The first phase of "submitting claims" is now online. SecondFi integrates a simple work order system into its applications. Affected users need to update to the latest version of the application and submit claims directly through the system.

The second phase is scheduled to start in mid-August, when a dedicated migration tool will be launched that allows users to automatically withdraw their assets. The tool will perform operations such as delegating ADAs, transferring tokens, and non-homogeneous tokens (NFT) to any Cardano wallet specified by the user. At this stage, users should be careful not to delete their SecondFi wallets or uninstall apps to avoid complicating the recovery process. The migration tool is currently undergoing an external security audit to verify its effectiveness and security.

The third and main phase is scheduled to be launched in early September and will launch a zero-knowledge certificate refund portal. The tool uses zero-knowledge certificates to allow affected users to prove that they are the owner of the stolen wallet and claim compensation without revealing sensitive data such as mnemonics or private keys. Throughout August, the portal will undergo rigorous cryptographic audits and other testing.

Small Dictionary: Zero-knowledge Proofs

Zero-knowledge Proofs (ZKPs) are cryptographic methods that allow one party to prove to another that a statement is true without revealing any additional information except that the statement is indeed true. In blockchain, zero-knowledge proof enhances privacy and security, helping users verify ownership or data validity without exposing private details.

Phase Schedule and Main Actions

Phase 1: Submit claims, now available, users submit claims through the app.

Phase 2: Migration tool, in mid-August, automatic extraction and transfer of assets.

The third stage: the zero-knowledge certificate refund portal. In early September, zero-knowledge certificates were used to make private claims.

Be wary of growing fraud risks

There have been reports that malicious actors are trying to exploit this incident to commit fraud by distributing fake browser extensions and posing as customer service personnel to send private messages. SecondFi reminds users to be wary of unknown messages and only trust extensions (with blue verification badges) provided through the official Chrome Web App Store. All web links should be accessed through the official SecondFi website to ensure authenticity.

SecondFi is coordinating with industry partners to prioritize the safety of affected users through an innovative zero-knowledge proof refund solution, while warning that teams never proactively contact users and should only obtain support or resources through verified channels.