Gnosis Chain has confirmed that it has executed a hard fork to recover approximately $9.4 million in funds frozen following the November 2025 Balancer V2 exploit. The hard fork activated on December 22, 2025, and the announcement came the next day via the official Gnosis Chain account.
According to the official announcement posted on Gnosis Chain’s X page, the hard fork has been activated, and the funds are no longer within the hacker’s control. To ensure consensus, the post also urged all remaining node operators to take action to avoid penalties.
The decision to rewrite the blockchain’s recent history to make users whole was touted as a solution, but it has exposed fault lines over governance and precedent on Gnosis Chain.
Gnosis Chain initiates a hard fork
According to a governance forum post, Philippe Schommers, Gnosis’ head of infrastructure, floated the idea that the network would need to undergo a hard fork on December 12. According to Schommers, this would help return funds frozen during the recent exploit of the DeFi protocol Balancer.
The hard fork was scheduled to go live on December 22.
Schommers wrote to nodes that fail to follow the chain with a majority of stake that they will face penalties. He said the team was focused on returning user funds by Christmas.
The move was framed as a technical “rescue mission,” but the announcement sparked a heated debate in the project’s community over who gets to decide when a blockchain’s immutability can be broken.
At the time, Schommers called the surrounding debate “an important one and, as always, we welcome all contributions.” He also emphasized that the hard fork depends on Gnosis Chain validators to go through.
“As it stands, our validators have a choice to exercise their collective power transparently, to protect users, even as we work toward a future where no one has that power at all,” he said.
Schommers also countered fears of the update affecting the chain’s immutability. “The hard fork requires relatively minor changes that do not affect chain history – and therefore do not affect fundamental immutability, which stands at the core of our ethos,” he said.
Why is Gnosis Chain going through a hard fork?
Balancer, an established decentralized exchange and automated market maker protocol, was targeted in November when an attacker exploited a vulnerability to siphon $128 million from Balancer V2 liquidity pools across multiple chains.
Harry Donnelly, founder and CEO of Circuit, has tagged Balancer’s breach “a serious warning” for the DeFi ecosystem. According to Donelly, the target was “one of the most trusted names in the space” and “an early pioneer with a culture of compliance, backed by rigorous audits and open disclosure.”
In response to the exploit, validators approved a soft fork that restricted bridge movements, freezing $9.4 million of the stolen assets on-chain. Recovering those funds required a hard fork, which is what triggered debates on the network’s commitment to immutability.
There have been mixed reactions to the move, with the camp split over how to interpret it. Lefteris Karapetsas, the founder of Rotki, a privacy-focused portfolio tracker, claimed the move reflects accountability rather than centralization.
“The coordinated soft fork and the clear plan toward a hard fork show that Gnosis Chain takes security, users, and ecosystem responsibility seriously,” wrote Karapetsas.
Others have claimed it sets a dangerous future precedent and have demanded formal rules to govern future interventions.
A user under the alias TheVoidFreak noted in their forum response that accepting a hard fork requires “a strict framework that no one can deviate from,” arguing that without it, violations of “Code is law” and immutability would have unmanaged consequences.
Join a premium crypto trading community free for 30 days – normally $100/mo.
Source: https://www.cryptopolitan.com/gnosis-hard-fork-to-recover-funds/
