Pirate Chain: validation bug created ~39.8M unbacked ARRR (~20% supply); ~$10.75M
8 million ARRR without authorization, roughly a 20% supply increase. The coins went into the shielded Sapling pool. 75M as the nominal value of those unbacked coins, not a confirmed realized loss.
Exchange NonKYC spotted suspicious deposits and restricted the account. Notaries paused; exchanges and pools were asked to pause.
The team first announced a rollback, then said it cannot unilaterally roll back a decentralized chain and is developing a recovery plan. It reports no sign of notary-key compromise and no break of shielded-pool cryptography.
Research snapshot from Pirate Chain, SlowMist Hacked, The Defiant, and CryptoTimes.
369 take
Unbacked mint at the chain validation layer is the same nightmare class as Liquid L-BTC. Once coins enter a shielded pool, tracing and clawback get hard.
Do not send, receive, or trade ARRR until Pirate Chain posts clear recovery guidance. Recovery plan is still open after the rollback walk-back.
Sources