How is the curl of the electric field possible?

The fact is that, in the general case $$ \vec{E} = -\vec{\nabla}V - \frac{\partial\vec{A}}{\partial t}; $$ (signs depend on conventions used) where $\vec{A}$ is called vector potential. You can consult for example Wikipedia.

Let us consider homogeneous Maxwell equations:

$$ \begin{cases} \vec{\nabla}\cdot\vec{B} = 0,\\ \vec{\nabla}\times\vec{E} + \frac{\partial\vec{B}}{\partial t} = 0; \end{cases} $$

It is well-known that every divergenceless filed can be written a curl of another vector field (we suppose to be in $\mathbb{R}^3$, for simplicity) just as we know that a curless field can be written as a gradient of a scalar function (always in a simply connected domain). Thus from the first equation,

$$ \vec{B} = \vec{\nabla}\times\vec{A}, $$

and substituting this in the second equation,

$$ \vec\nabla\times\left(\vec{E} + \frac{\partial\vec{A}}{\partial t}\right)=0, $$

since one can exchange the curl with the derivative w.r.t. time, and so one can set:

$$ \vec{E} + \frac{\partial\vec{A}}{\partial t} = -\vec\nabla V, $$

from which

$$ \vec{E} = -\vec{\nabla}V - \frac{\partial\vec{A}}{\partial t}. $$

Note that if your magnetic field is time-independent, you recover the well-know formula

$$ \vec{E} = -\vec\nabla V. $$

When there is a time-varying magnetic field, the electric field is non-conservative and therefore cannot be written in the form $\mathbf{E}=-\nabla V$.

For dynamic electric and magnetic fields, there is a piece of the electric field that depends on the vector potential: $$ \vec{E} = - \vec{\nabla} V - \frac{\partial \vec{A}}{\partial t}, \qquad \vec{B} = \vec{\nabla} \times \vec{A}. $$ Taking the curl of the first equation yields Faraday's Law (with the $V$-dependent term dropping out as you note); taking the divergence of the second one yields the "no monopole" law $\vec{\nabla} \cdot \vec{B} = 0$.