# Zano Rewinds Its Blockchain One Month After Gateway Flaw Minted Unauthorized Coins

The privacy network restarted at block 3,833,000, the last block before the August hard fork that activated the broken feature, and says it will compensate users from team and large-holder funds rather than new issuance.

- Published: 2026-09-28T05:43:34.972Z
- Canonical: https://polylog.news/crypto/2026-09-28/zano-rewinds-its-blockchain-one-month-after-gateway-flaw-min
- Publisher: Polylog (Crypto desk)
- Section: crypto
- Sources: [crypto.news](https://crypto.news/zano-restarts-chain-at-block-3833000-after-exploit/), [Rekt News](https://www.rekt.news/)

Zano, a privacy-focused chain with its own stablecoin, [restarted its blockchain at block 3,833,000](https://crypto.news/zano-restarts-chain-at-block-3833000-after-exploit/) after a defect in its Gateway Address feature allowed an attacker to create ZANO and Freedom Dollar (fUSD) tokens that the protocol never authorized. The chosen block sits immediately before Hard Fork 6, the August upgrade that activated the feature, so the restart erases roughly one month of transaction history.

The root cause was not a stolen key. According to the project, wallet keys were never compromised, and the flaw sat in the supply-creation path opened by the new gateway logic, which is the most serious class of failure for any chain whose value depends on a verifiable cap. Zano has not published a figure for the unauthorized supply created.

The limits of the remedy matter as much as the remedy. A chain restart cannot claw back value that already left the network, so any proceeds converted into Tether (USDT), Dai (DAI) or other assets on other chains stay with whoever holds them. MEXC suspended ZANO and fUSD deposits and withdrawals while it migrates to the recovered chain. Zano says reimbursement will draw on developer, team and large-holder funds, with no additional ZANO issued.

The incident sits alongside the recurring unauthorized-mint failures tracked by [Rekt News](https://www.rekt.news/), where the loss comes from a privileged path working exactly as coded rather than from a reentrancy bug.

## What this means

The exposed parties are ZANO and fUSD holders, the exchanges that must reconcile balances across a reorganized ledger, and anyone who assumed a small privacy chain's supply is auditable in practice. The mechanism is supply integrity: once unauthorized units enter circulation on a chain where amounts are shielded, the only detection channel is the developers' own accounting, and the only cheap remedy is a coordinated rewrite of history. The precedent is Ethereum's 2016 DAO fork and Bitcoin's 2018 CVE-2018-17144 inflation bug, where the remedy was patch-and-social-consensus and the reputational cost persisted well beyond the technical fix. The likelier outcome over the coming weeks is that exchanges reopen ZANO markets after reconciliation while liquidity stays thin and the reimbursement pool is disputed by holders who transacted inside the erased month. That read would be wrong if Zano publishes a full accounting of the unauthorized supply and funds reimbursement without drawing on team balances, which would indicate the damage was small enough to absorb.

## What to watch

- Whether Zano publishes the size of the unauthorized ZANO and fUSD supply, which would show whether the rollback fully restored the ledger or only capped further damage.
- Whether other exchanges follow MEXC in suspending deposits and withdrawals, a signal of how much confidence listing venues have in the recovered chain.
- Whether other privacy chains audit similar gateway or bridge-minting features, since shielded supply makes unauthorized issuance harder for outsiders to detect.