Gnosis Chain, a blockchain network focused on decentralized infrastructure, has taken direct action to recover funds lost in the Balancer exploit.
On December 23, Gnosis confirmed that its community of validators had approved a hard fork to remove the stolen funds from the hacker’s control. According to the team, the funds are now safe and no longer accessible to the attacker.
What happened before the hard fork
In early November, a Balancer-related exploit affected contracts executed on Gnosis Chain. In response, most validators quickly adopted a soft fork to limit further damage. Since then, developers, validators, and other contributors have worked together to build a stronger solution. This solution came in the form of a hard fork, which changes the rules of the chain at the protocol level.
Yesterday, our operator community decided to execute a hard fork to recover funds lost during the Balancer hack. The funds are now beyond the control of the hacker.
All remaining node operators must take steps to avoid penalties.
– Gnosis Chain (@gnosischain) December 23, 2025
Why the Hard Fork is important
A hard fork only works if most validators update their software. Gnosis released new client versions and gave node operators 10 days to update. Validators that fail to upgrade risk penalties and become out of sync with the network. The fork activated on December 22 at 16:11:40 UTC, once enough validators accepted the change.
The main objective is simple. Recover stolen funds and place them under community control. Gnosis aims to transfer the funds to a DAO-controlled wallet before Christmas. The community will later decide how users can claim their funds and how contributors can receive recognition or compensation.
⚠️Important
Reminder to node operators who choose to execute a hard fork which could allow a return of funds to those affected by the Balancer exploit.
The deadline is December 22, 2025 at 16:11:40 UTC. Nodes that do not follow the chain with a majority of participation will be…
– Gnosis Chain (@gnosischain) December 19, 2025
What’s next for Gnosis?
This recovery effort delayed the planned Fusaka hard fork. Gnosis now plans to test Fusaka on Chiado before Christmas and roll it out to mainnet in the new year. The team also plans to release a full technical post-mortem explaining what went wrong and how the recovery worked.
The biggest debate
The incident reopened a key question in cryptography. When should validators intervene? Gnosis says it wants a future in which validators cannot censor transactions. For now, this encourages an open discussion about how the community should use this power responsibly.
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