Gnosis Chain Warns of Validator Penalty Post Balancer Hack Recovery Hard Fork
Gnosis Chain GNO $122.4 24h volatility: 1.4% Market cap: $323.10 M Vol. 24h: $5.79 M executed, on December 22, a governance-approved hard fork to recover around $9.4 million of the frozen funds from the Balancer hack.
Passed one day of the execution, the Gnosis official account warned “remaining validators” to upgrade and “avoid penalties.”
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On December 12, Gnosis’ head of infrastructure Philippe Schommers explained in a governance forum post that “contributors, validators and other stakeholders have been working on a hard fork” to recover funds previously frozen on the Gnosis Chain.
The freezing happened following a validators-approved soft fork in November 2025, addressing part of the funds identified as belonging to the Balancer exploit’s attacker.
Balance hack: hard fork proposal on Dec. 12, 2025. | Source: Gnosis Governance Forum
As planned, Gnosis node operators had ten days to upgrade, executing the hard fork that allowed for the funds’ seizure.
Earlier this year, the Sui SUI $1.44 24h volatility: 2.5% Market cap: $5.37 B Vol. 24h: $530.34 M network faced a setback following the CETUS hack.
The Sui Foundation, Cetus Protocol, and OtterSec gained community approval to use a special signature to seize the attacker’s funds, recovering part of the losses.
Following this series of developments, the Gnosis Chain has now posted a warning on X to all “remaining” validators to upgrade their nodes accordingly.
Not upgrading would result in penalties, executed via the GNO token. The penalties can range from not receiving staking rewards to potentially leading to slashing in extreme cases of prolonged non-participation or if interpreted as disruptive behavior.
Yesterday, our community of operators decided to execute a hard fork to recover the funds lost in Balancer hack. The funds are now out of the hacker's control.
All remaining node operators should take action to avoid penalties.
— Gnosis Chain (@gnosischain) December 23, 2025
Divided Reactions
Despite the reported approval, Gnosis’s decision has divided opinions, with some praising transparency and others criticizing the breach of immutability.
Ignas DeFi commented on the matter, mentioning this hard fork sets precedents for future decisions.
“But this fork sets a big precedent: Do we hard fork for every hack? Only if losses 5% of TVL? Why not 3%? Can app devs start assuming the chain will step in if they mess up, lowering security standards?” He noted that “The hard fork and the debate will end up setting hard-fork precedent rules for other chains to follow”.
In one of his related posts, however, he explained that the soft fork already broke Gnosis’ neutrality and claimed that other chains took similar decisions around the Balancer hack.
“We’ve already seen similar censorship interventions elsewhere,” Ignas said, pointing out “Berachain and Sonic after the same Balancer hack, and Sui after the $162M Cetus exploit.”
Gnosis is considering a hard fork to recover funds from the Balancer hack.
After the hack, ~$9.4M was frozen on Gnosis Chain via a soft fork.
Funds cannot move from the attacker's address. The funds are stuck.
Returning them to victims requires a hard fork.
I think Gnosis… pic.twitter.com/osoXg1wppJ
— Ignas | DeFi (@DefiIgnas) December 15, 2025
The Balance V2 Hack and Gnosis
The referenced incident involved a Balancer V2 Protocol exploit that drained approximately $128 millionacross affected pools. This was not a chain-specific hack, but a protocol exploit that affected multiple chains, including Gnosis.
Harry Donnelly, founder and CEO of Circuit, called Balancer’s breach “a serious warning” for the DeFi ecosystem, noting that this 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,” according to a report by The Defiant.
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Vini Barbosa has covered the crypto industry professionally since 2020, summing up to over 10,000 hours of research, writing, and editing related content for media outlets and key industry players. Vini is an active commentator and a heavy user of the technology, truly believing in its revolutionary potential. Topics of interest include blockchain, open-source software, decentralized finance, and real-world utility.
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### Crypto Market Overview (December 23, 2025)
The cryptocurrency market traded sideways today, with total capitalization slipping 0.8% to $3.07 trillion amid low holiday volume and anticipation of U.S. GDP data and Fed signals. Bitcoin hovered around $88,088, down 0.7% over 24 hours and ranging from $86,997 to $90,541 with $25.8 billion in volume, while Ethereum eased 1% to $2,993, just below $3,000. Altcoins like Chainlink (LINK) dipped 0.6% to $12.49 and Sui (SUI) 0.4% to $1.45, though some like Polymesh (POLYX) gained on project updates.
### Technical Analysis
Bitcoin's "Asia up, U.S. down" pattern persisted, briefly hitting $90,000 before retracing to $88,000 support; RSI at 47 shows neutral momentum, with resistance at $90,000 and potential drop to $86,000 if breached. Ethereum consolidated near $2,900–$3,000, facing EMA pressure amid $555 million yearly outflows, but network growth with 195,000 new wallets suggests underlying strength. Liquidations rose 11% to $222 million, with open interest at $129 billion indicating rebuilding leverage despite extreme fear (Fear & Greed Index at 24).
### Key Drivers and News
Institutional outflows hit $952 million weekly, led by$BTC Bitcoin and$ETH Ethereum ETFs, as investors rotated to Solana and $XRP XRP amid maturing market dynamics. Gold and silver's record highs drew safe-haven flows, pressuring crypto, while U.S. equities' Santa rally (S&P 500 monthly gains streak) offered indirect support. A massive $27-28.5 billion Bitcoin and Ethereum options expiry on December 26 looms, likely pinning prices in range until then. Ethereum's stablecoin surge (65% in Q3) and Polymesh's Confidential Assets launch boosted select altcoins.
### Outlook
Short-term volatility expected ahead of GDP report and options expiry, with Bitcoin potentially reclaiming $90,000 on positive data or testing $86,000 downside. Ethereum could stabilize above $3,000 if outflows ease, benefiting from regulatory tailwinds like the GENIUS Act. Sentiment remains in extreme fear, but year-end liquidity may spark a rebound; monitor economic releases closely and research before investing.
🟢 MACD Golden Cross Sparks Bullish Momentum Across Select Altcoins
$VOOI
🟢 MACD Golden Cross Sparks Bullish Momentum Across Select Altcoins
Technical indicators are flashing renewed optimism in the crypto market as several altcoins print a MACD Golden Cross, a classic bullish signal suggesting momentum is shifting upward. Volume confirmation adds further confidence, highlighting where smart money may already be positioning.
🚀 Top Volume Leaders Showing Strength
VTHO (VeThor Token) leads the pack with $12.31M in volume, signaling a strong momentum reversal. As the gas token of the VeChain ecosystem, rising activity often reflects increasing on-chain usage, making VTHO a notable bullish continuation candidate.
OPEN (Open Custody Protocol) follows closely with $11.32M in volume. The project’s innovative custody solution, featuring keychain aggregation technology, places it squarely in the growing digital asset infrastructure narrative.
WOO (WOO Network) recorded $5.25M in volume, breaking above key resistance levels. With its deep liquidity model and increasing institutional DeFi adoption, WOO continues to attract sustained interest from traders and market makers.
🌱 Emerging Opportunities Gaining Traction
Several lower-cap assets are also flashing early bullish signals. GIGGLE ($3.74M) blends charity and education within the memecoin space, while BGSC (BugsCoin) ($3.49M) focuses on community reward systems. JCT, MON, and MERL round out the list, all showing improving volume profiles that may precede stronger price action.
🔴 MACD Death Cross Raises Caution Flags
On the bearish side, SUI stands out with a significant $31.13M volume death cross, suggesting a potential trend reversal after recent strength. NEAR ($9.85M) also shows technical weakness, despite ongoing ecosystem developments. Additional tokens such as IOTX, HOT, 1000SATS, and ZKJ are displaying similar bearish momentum.
💡 Smart Trading Strategy Ahead
Traders may want to prioritize golden cross setups with volume above $3M for better liquidity and follow-through. VTHO, WOO, and OPEN currently offer the strongest risk-reward profiles, while SUI and NEAR should be monitored closely for potential support bounces or contrarian plays if fundamentals remain intact.
📊 Momentum favors the prepared—trade with discipline and manage risk accordingly.
🟢 MACD Golden Cross (Bullish)
🔝 Top Volume Leaders
VTHO (VeThor Token) — $12.31M
OPEN (Open Custody Protocol) — $11.32M
WOO (WOO Network) — $5.25M
🌱 Emerging Opportunities
GIGGLE — $3.74M
BGSC (BugsCoin) — $3.49M
JCT — $3.23M
MON — $1.74M
MERL — $1.66M
🔴 MACD Death Cross (Bearish)
⚠️ Major Concerns
SUI — $31.13M
NEAR — $9.85M
📉 Additional Bearish Signals
TAC
ZKJ
1000SATS
MITO
BSU
IOTX
HOT
PEP