Exchange suspends CORE transfers due to Core DAO preparing for emergency fork

Core DAO began to coordinate emergency hard forks after discovering that a small number of verifiers had received excessive CORE rewards, and multiple exchanges restricted token transfers.

Summary

Core DAO has contained an incident that allowed a small number of verifiers to claim CORE rewards that exceed the predetermined circulation of the agreement. An emergency hard fork is currently being coordinated as a forward upgrade that will not roll back the network or undo confirmed transactions. Before and after the disclosure of reward issues, exchanges such as Coinbase, Bithumb, and Coinone restricted transfers from CORE. Core has not disclosed the number of COREs overissued and whether additional tokens have entered circulation.

Core said on September 1 that it had contained the problem and prevented its so-called "malicious verifiers" from receiving further excessive rewards. The network is currently working with verifiers to make permanent repairs through forward upgrades, which means previously confirmed transactions will remain unchanged. "The assets are safe," Core said, adding that a full technical post-mortem analysis report will be released after the response is completed.

Update: The problem has been controlled and malicious verifiers can no longer receive excessive rewards. We are coordinating an emergency hard fork with the validator to deploy a permanent fix. This is an upgrade, not a rollback. Asset security. A complete post-mortem analysis report will be released later.

The project has not disclosed the number of COREs distributed through the event, the number of verifiers involved, the length of time they can receive excess rewards, and whether any additional tokens have entered the market.

Core DAO hard fork will not undo transactions

Core first disclosed the issue on Monday, when it said a small number of validators were accumulating block rewards far exceeding the number predetermined by the agreement. At the time, the project said it had determined the root cause and was developing mitigation measures. Core said the issue was limited to reward issuance and did not affect network security or user asset custody. By Tuesday, the team said the activity was under control and began coordinating an emergency hard fork with its validator community. Core has not announced the activation time of the upgrade, nor has it disclosed the technical vulnerability that led to the claim for excess rewards.

The difference between a forward upgrade and a rollback is that the planned fork aims to change network rules from a specified point without rewriting transactions that have been recorded on the blockchain. Main-network upgrades may require coordination between validators and other network participants because nodes must run compatible software after the new protocol rules take effect. It has been previously reported that a hard fork on the production blockchain may require verifiers and users to agree on updated network rules. Core has not yet stated whether verifiers need to install specific software versions for emergency upgrades, or how many verifiers need to participate in the fork.

Exchange restricts CORE transfers

Reward issues led several centralized exchanges to restrict CORE deposits or withdrawals during the online investigation of the incident. According to its status page, Coinbase suspended sending and receiving capabilities for the Core DAO network. Trading functions are still available, and buying, selling, conversion and fiat transactions are not affected by online transfer restrictions. South Korean exchanges Bithumb and Coinone suspended CORE deposits and withdrawals citing network-related security issues. Bitget restricted CORE deposits and withdrawals citing its alleged wallet maintenance, while LBank suspended deposits based on project requirements. These exchanges did not attribute the loss of client funds to the Core incident. Core insisted that user assets were not affected and said the issue involved the issuance of verifier rewards. The project has not disclosed whether the exchange will need to complete technical work related to hard forks before resuming normal CORE transfers.

Verifier rewards are still attracting attention

The outstanding issues focus on the number of COREs that verifiers receive and the mechanism that allows them to receive more than the amount predetermined by the agreement. Core has not yet stated whether the excess reward represents a newly created CORE that should have been allocated at a later date, or is another accounting issue in the validator reward system. The project also did not disclose whether any verifiers sold, transferred or otherwise transferred the additional CORE after receiving it. Its planned post-mortem analysis report is expected to provide technical details on the root cause, but Core has not yet announced a release date.

Verifier is part of the Core Network Architecture, which combines delegated proof of stake with security related to Bitcoin. Over the past few years, Core has been building its network around Bitcoin pledges and decentralized financial applications. In March 2025, Core integrated with Cobo to expand its dual Bitcoin pledge service for institutional users in Asia. The arrangement allows Cobo users to pledge Bitcoin and CORE while earning bitcoin-denominated proceeds. At that time, institutions had pledged more than 6,200 bitcoins through Core, and more than 150 decentralized applications compatible with Ethereum virtual machines had been integrated into the ecosystem. At the time of the partnership announcement, Core's total lock-in value exceeded $525 million. The network has become one of the largest Bitcoin sidechains by locked value. Early data shows that Core's TVL is US$423 million, while 55% of Bitcoin computing power is used to protect the network. Messari data cited at the time showed that Core had 23 validators in the second quarter of 2024. Core's verifier system plays a direct role in distributing CORE rewards. However, the current incident remains limited in terms of technical details publicly disclosed because the project has not yet explained which part of the reward process was utilized.

Emergency upgrades follow other recent hard forks

The Core plan's response came shortly after other blockchain networks used hard forks to modify protocol rules, although the reasons for these upgrades varied. For example, BNB Chain activated its Pasteur hard fork on August 25 after making scheduling changes to bridge verification, verifier authorization and block capacity. One of Pasteur's changes addresses cross-chain verification weaknesses that can lead to double counting of verifiers when determining whether approvals have reached required thresholds. BNB Chain stated that prior to the deployment of the fix, the vulnerability had not been found to have been exploited or associated with asset loss. Cardano completed another network upgrade in July, with its van Rossem hard fork migrating the main network to protocol version 11, which introduced changes to Plutus costs and also prepared for the Ouroboros Leios architecture in the network plan. Emergency upgrades to Core were coordinated after reward issues were detected, rather than as part of a previously announced protocol development plan. The network said that with the mitigation measures implemented, excess reward activities could no longer continue. Core has not disclosed the identities of the validators it calls malicious or said whether it plans to take further action against them. Its upcoming post-mortem analysis report is expected to address the technical reasons for the incident, while the amount of CORE overissued and whether the tokens have entered circulation have not yet been disclosed.