The Root Cause: Nonce-Generation Vulnerability
Published 7/23/2026, 1:41:26 AM
Zilliqa halted native transactions on July 22, 2026, following the discovery of a critical vulnerability in its Ledger hardware wallet app. While the bug had existed since the app's launch in 2019, it was only identified and exploited in July 2026, leading to the emergency suspension of the network to protect user funds [Source: https://x.com/zilliqa/status/2079847348780536050].
The Root Cause: Nonce-Generation Vulnerability
The technical failure stemmed from a defect in how the Zilliqa Ledger app handled EC-Schnorr signatures for native (non-EVM) transactions.
- The Buffer Error: When generating a nonce (a unique random number used for signing), the app's routine produced 40 bytes of randomness. However, a coding error caused the app to copy the wrong 32-byte segment from this buffer [Source: https://www.theblock.co/post/409383/zilliqa-halts-native-transactions-over-bug-in-its-ledger-app-dating-to-2019].
- Predictable Entropy: This error resulted in the most significant 64 bits of every generated nonce being fixed at zero.
- Mathematical Recovery: Because the nonces lacked sufficient entropy, attackers could use a mathematical technique known as lattice reduction (specifically solving the "Hidden Number Problem") to reconstruct a user's private key from publicly available on-chain signatures [Source: https://www.kucoin.com/news/flash/zilliqa-ledger-app-vulnerability-exposes-native-transaction-signatures].
Impact and Exploitation
The vulnerability allowed an attacker to recover a private key in seconds using commodity hardware, provided they had access to at least 5 affected signatures from the target wallet.
| Metric | Details |
|---|---|
| Affected Transactions | Native ZIL transactions signed via Ledger (2019–2026). |
| Unaffected Systems | EVM transactions, Zilliqa SDKs (JS, Go, Python), and non-Ledger wallets. |
| Exploitation Start | Active exploitation was detected on-chain starting July 19, 2026. |
| Market Reaction | ZIL price dropped ~4.8% to $0.0024; Upbit placed ZIL on a delisting watch [Source: https://beincrypto.com/upbit-zilliqa-delisting-watch-ledger-flaw/]. |
Remediation and Critical Warning
Although Zilliqa and Ledger released a patched version of the app to restore full-width nonce generation, the fix is not retroactive.
Crucially, any private key that signed 5 or more native transactions between 2019 and 2026 is considered permanently compromised. Because the signatures are immutable on the blockchain, attackers can still derive the keys even after the app is updated. Zilliqa advised users with affected wallets to migrate to new addresses rather than attempting to "fix" existing ones [Source: https://www.theblock.co/post/409383/zilliqa-halts-native-transactions-over-bug-in-its-ledger-app-dating-to-2019].
In summary, the halt was caused by a 2019 coding error in the Ledger app's signature process that allowed private keys to be mathematically reversed once enough transactions were signed. The network was paused in 2026 to prevent further theft after active exploitation was confirmed.