Flow (FLOW) has been left out of the broader market recovery, with the token experiencing a double-digit drop over the past 24 hours.
The drawdown comes as the network continues its remediation efforts after suffering a recent exploit.
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Why is FLOW Token’s Price Dropping?
The cryptocurrency market rose nearly 2.3% today, with all top 10 assets trading in the green. Bitcoin (BTC) climbed above $90,000, while Ethereum’s (ETH) price also surged past $3,000.
However, FLOW did not benefit from the market-wide rally. BeInCrypto Markets data shows that the altcoin has dropped nearly 14% over the past 24 hours, ranking as the second-largest daily loser on CoinGecko.
It is worth noting that the decline is not limited to today. Like the broader market, FLOW has faced challenges over the past few months.
However, the decline intensified on December 27 after the network experienced a security incident. The price plunged by more than 50% in a single day, falling to a new all-time low of $0.079 on Binance. Leading South Korean exchanges, Upbit and Bithumb suspended FLOW deposits and withdrawals
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“Flow (FLOW) has been designated as a trading caution asset by member exchanges of the Digital Asset Exchange Alliance (DAXA). Deposit and withdrawal services for Flow (FLOW) have already been suspended. When services resume, only withdrawals will be reactivated, while the resumption of deposit services will be announced later in accordance with procedures following the trading caution designation,” the translation of Upbit’s notice read.
Flow Foundation Moves to Recovery Phase After $3.9 Million Exploit
On December 27, an attacker moved approximately $3.9 million in assets off the Flow network after exploiting a vulnerability in its execution layer. The team contained the incident, preventing further losses.
The Flow Foundation emphasized that the incident did not compromise existing user balances.
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“The confirmed funds exited represent a manageable amount that does not threaten network solvency or user funds. The immediate priority is remediation and safe restart,” the foundation wrote.
Initially, Flow proposed restoring the network to a checkpoint prior to the exploit. However, after receiving substantial feedback from validators and the developer community, the Foundation revised its approach and introduced a new remediation plan.
The approach avoids a network rollback or reorganization, aiming to preserve legitimate user activity. According to the foundation, more than 99.9% of accounts remain unaffected and will be fully operational at relaunch.
“At network restart, accounts identified as recipients of fraudulently minted tokens will be temporarily restricted as a precautionary measure….. Flow core developer team will propose a software upgrade to node operators. This software upgrade will temporarily enable the Community Governance Council to remediate fraudulent assets,” the post added.
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The Foundation subsequently announced that validators had approved a software upgrade, with the network moving into a remediation and testing phase. As part of the Flow Network Recovery plan, Phase 1 is scheduled to begin at 6 a.m. PT.
At that time, the Cadence environment will return to normal operations, while accounts impacted by the attacker’s poisoning activity will remain temporarily restricted.
The EVM environment will also be limited to read-only mode. According to the Foundation, more than 99.9% of Cadence accounts will regain full functionality at this stage.
This development reflects the team’s sustained push to restore normal operations, though it remains uncertain whether the recovery process will be enough to rebuild market confidence and support a rebound in price.
