Cardano founder Charles Hoskinson has issued his first public statement following a security incident in the Midnight ecosystem that triggered a sharp decline in the NIGHT token's price.

Midnight is a privacy-focused blockchain network developed by Input Output Global (IOG), the engineering company co-founded by Hoskinson that also builds Cardano's core infrastructure. NIGHT functions as the ecosystem's native token for transactions and governance.

Hoskinson clarified that the attack did not compromise the Midnight protocol itself or the NIGHT smart contract on Cardano. Instead, he attributed the breach to third-party bridge infrastructure.

"Midnight itself wasn't hacked. NIGHT's smart contract on Cardano wasn't hacked. What was hacked was the third-party bridge," Hoskinson stated.

Cross-chain bridges, which enable assets to move between disparate blockchain networks, have been among the most frequently exploited targets in decentralized finance. Notable incidents include the Ronin Network bridge exploit that resulted in approximately $620 million in losses in 2022 and the Wormhole bridge attack the same year, which saw roughly $320 million stolen. These recurring failures have made bridge security one of the most scrutinized areas of blockchain infrastructure.

According to Hoskinson, initial findings suggest the incident is entirely confined to the Wanchain infrastructure. He explained that the system comprises four core components—both on-chain and off-chain—operating across Cardano and BNB Chain. He emphasized that a comprehensive audit is necessary to determine which specific component was affected and how the vulnerability was exploited.

Hoskinson said his team is awaiting an explanation from the Wanchain team, adding: "Questions must be answered and audits must be conducted. We will get to the truth about why this happened, who is responsible, how much the loss is, and how the damage will be remedied."

The Cardano founder also warned that comparable attacks could become increasingly common as artificial intelligence technologies advance. Hoskinson noted that AI has made significant strides in the information security domain, enabling vulnerabilities to be identified and potentially exploited faster than human teams can respond.

Reflecting on his 15 years in the cryptocurrency sector, Hoskinson observed that the industry has grown desensitized to such incidents due to the persistent frequency of attacks and bridge security failures. This normalization, he argued, seriously undermines consumer confidence and underscores the need for next-generation financial infrastructure.

Hoskinson described the NIGHT project's broader vision as combining the regulatory mechanisms, insurance products, and asset recovery capabilities found in traditional finance with cryptocurrency features such as individual custody and self-sovereign identity. The goal, he said, is to return control to users over how their money functions.

On the market response, Hoskinson indicated that the NIGHT token has begun recovering from its initial plunge, suggesting the Midnight ecosystem has weathered its first significant crisis. "NIGHT experienced its first major event and emerged stronger. Midnight has begun to recover and has passed its first major test," he concluded.

Source: Bitcoinsistemi