Gnosis Chain is performing a hard fork to recover funds related to Balancer Exploit

Balancer suffered a major exploit in November that resulted in the theft of nearly $120 million in digital assets.

Gnosis Chain said its community of node operators has conducted a hard fork to recover funds related to the Balancer exploit. This week, Gnosis confirmed that the assets are now out of the attacker’s control and urged remaining operators to update their nodes to avoid fines.

The exact total amount of funds recovered has not yet been specified.

Validator approved hard fork

In a message on X, the network said The decision was made by operators after weeks of discussion following the hack of decentralized exchange and automated market maker Balancer in November, which resulted in the loss of nearly $120 million in digital assets across multiple chains.

The hard fork follows a previous emergency soft fork adopted by a majority of validators in November that restricted bridge movements and froze stolen funds on Gnosis Chain. According to Gnosis, the hard fork was necessary to move these frozen assets and enable their recovery.

The Balancer exploit was later traced to a vulnerability in Balancer V2 Composable Stable Pools, despite the protocol undergo 11 audits by four different security companies. Data from the chain showed that the attacker had moved large amounts of staked Ether to new wallets shortly after the breach.

Balancer later said that white hat hackers were able to recover approximately $28 million, although most of the stolen assets initially remained inaccessible. Gnosis Chain was one of the affected networks, and approximately $9.4 million in stolen funds were frozen to the chain through the soft fork.

Mixed reactions from the community

Philippe Schomers, head of infrastructure at Gnosis, had done so said earlier this month that a hard fork would be needed to return that money to users, while adding that node operators who didn’t follow the majority chain would face fines. He also said the team’s priority was to enable recovery before the end of December.

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The move sparked debate within the community. Proponents argued that coordinated intervention demonstrated responsibility and commitment to user protection, while critics warned that such actions could undermine the principle of immutability and called for clearer rules for future interventions.

Some community members said the soft fork had already changed the chain’s history, making the hard fork a continuation of that decision, while others pushed for a formal framework to define when similar actions would be justified.