Pirate Chain exploit: an attacker minted 39.8 million ARRR, and the team refused to roll back the network

What happened to Pirate Chain

Pirate Chain (ARRR) is a privacy coin where every transfer is hidden by default: amounts and addresses are not visible on the blockchain. On October 14, almost 40 million coins appeared on it that nobody was supposed to create.

Timeline based on the team's posts on X, the code on GitHub and the block explorer (times in UTC):

The new coins add about 20% to the 196.2 million ARRR that were in circulation before the attack. The coin's maximum supply is 200 million, so the network now effectively holds more coins than should ever have existed.

How coins were minted out of thin air

The team has not published a detailed post-mortem yet, but two code fixes and the transaction itself on the blockchain show the mechanism. The attack combined two validation bugs:

1. Bypassing the issuance check. The node skipped input accounting for transactions that looked like a coin import from another chain. Such a transaction has to prove that the coins were burned on the source chain, but the check never reached it. The fix's code says imports were validated this way before version 6.0.0, meaning the bug came with the Ironwood branch.
2. Spoofing the output address. Pirate Chain forbids open, transparent outputs. The attacker built a script that the node took for a harmless one, while it was actually spendable with a secret word. That word is written in the open on the blockchain: "f0-attacker-secret".

The team stresses that the cryptography of shielded transfers was not broken: "Evidence does not indicate any compromise of notary keys or the cryptography underlying Pirate Chain's shielded transactions." What broke was ordinary transaction validation code.

Why didn't the pool protection, the very mechanism that watches issuance, kick in? This mechanism, the "turnstile", catches cases where more is withdrawn from a shielded pool than went into it. Here the coins were minted outside, in the transparent layer, and then deposited into the pool the regular way. The pool balance never went negative, so the turnstile stayed silent.

Why the rollback never happened

On October 15 the team announced it would return the network to its pre-attack state, and exchanges halted deposits and withdrawals. Fourteen hours later the position changed: "Because Pirate Chain is decentralized, it is not possible to freeze the network or unilaterally rollback its blockchain history."

A blockchain rollback means miners and nodes agree to accept a different version of history. The more independent participants there are, the harder that is, and on a private network you also cannot see who received what after the attack. The team itself writes that further movement of funds inside the shielded pool cannot be traced.

What is known about the attacker's funds:

• all 39.8 million ARRR went straight into the Sapling pool, and judging by the explorer about half was later moved into the new Ironwood pool;
• the attacker sent part of the coins to the NonKYC exchange, which noticed the suspicious deposits and restricted the account;
• nobody has reported how much was sold.

Since October 15 there have been no large transfers in the shielded pools: holders are following the request not to move funds.

What about exchanges and the price

As of the morning of October 16, ARRR deposits and withdrawals are closed on all three venues where the coin trades: MEXC and NonKYC at the team's request, Gate according to its API. Trading continues, and prices on the exchanges have drifted apart because coins cannot be moved between them. Holders whose ARRR sat on an exchange can now neither withdraw nor move it: that is how custody with an intermediary works in any incident, and it is why many people prefer a crypto exchange without registration that sends coins straight to their own address.

According to CoinGecko, at 19:00 UTC on October 14, around the time of the attack, ARRR traded at $0.29, and on October 16 at 09:55 UTC at $0.26, down 6% over 24 hours, with a market cap of about $51 million. dPoW notarization, which protects Pirate Chain from history rewrites, is still stopped, the fixes exist only in a test branch, and there is no signed release.

How other privacy coins protect issuance

The key question for any privacy coin is how to make sure nobody is secretly printing it when amounts are hidden. Pirate Chain is not the first network where a bug of this kind was found, but in the known cases of 2017 and 2018 the other networks caught it before attackers did:

Each network has its own way of checking:

• Monero keeps everything in one pool, amounts are hidden but add up mathematically: every transaction proves that inputs equal outputs, and the issuance of new coins in each block is public and can be counted.
• Zcash keeps a public record of the balance of each shielded pool. Under the ZIP-209 rule a block is rejected if a pool balance goes negative. Zcash launched its new Ironwood pool in July with a mandatory turnstile from day one.

For more on how the two approaches differ, see our Monero vs Zcash breakdown of which coin is more private.

What privacy coin holders should do

If you hold ARRR, the sensible move right now is to follow the team's request: do not transfer coins and wait for the post-mortem and recovery instructions. Nobody stole the coins on your addresses: the attack created new coins rather than taking existing ones. The question is what the old ones will be worth now that supply has grown by a fifth.

The broader lesson: a coin's privacy rests not only on cryptography but also on node code and on how the network monitors issuance. The longer a coin lives without serious incidents and the more independent developers and auditors it has, the lower this risk. If privacy matters to you, keep privacy coins in your own wallet rather than on an exchange: in an incident, an exchange closes withdrawals first.

How to buy Monero or Zcash to your own wallet

Pirate Chain is not available on VertEXchange, but the two most proven privacy coins are. Exchanges run without an account: no email, phone or password needed. You pick a pair, enter your wallet address and see the rate and the amount you will receive before sending. Coins go straight to your address, the service does not hold them.

• A fixed rate is held for about 15 minutes while your transfer confirms.
• You can set a refund address in case the exchange does not go through.
• Personal fields of an operation are deleted 24 hours after it completes.
• Support chat is available on every page, issues are resolved by exchange code.

This way you can exchange BTC to Monero straight to your wallet address or buy Zcash with bitcoin without an exchange account.

FAQ

What happened to Pirate Chain on October 14, 2026?

Using two bugs in transaction validation code, an attacker created 39.8 million ARRR, about 20% on top of the supply, and immediately moved them into the shielded pool. Exchanges closed deposits and withdrawals, and dPoW notarization has stopped.

Will there be a Pirate Chain blockchain rollback?

No. On October 15 the team first announced a rollback and then wrote that a decentralized network cannot be frozen or unilaterally rolled back. A recovery plan is promised in a future post-mortem.

Was Pirate Chain's cryptography broken?

According to the team, no: neither the notary keys nor the cryptography of shielded transfers were compromised. The bugs were in ordinary transaction validation code.

Did ARRR holders lose their coins?

No, the attack did not take anyone's coins, it created new ones. But the supply grew by about a fifth, and holders are asked not to move funds until the team issues instructions.

Could this happen to Monero or Zcash?

Bugs that allowed creating coins have been found there too: in Monero in 2017 and in Zcash in 2018. Both were fixed before anyone exploited them. In 2026 a bug was found in Zcash's Orchard pool, and in response the network launched the new Ironwood pool with a mandatory turnstile. In Zcash the balance of each shielded pool is tracked publicly, in Monero issuance is verified mathematically in every transaction.

Where is ARRR trading now?

Trading continues on MEXC, Gate and NonKYC, but deposits and withdrawals of the coin are closed as of the morning of October 16.