Flow (FLOW) has been excluded from the broader market rally, with the token seeing a double-digit decline over the past 24 hours.
This removal comes as the network continues its remediation efforts after suffering a recent exploit.
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Why is the FLOW token price falling?
The cryptocurrency market rose almost 2.3% today, with all top 10 assets trading in the green. Bitcoin (BTC) climbed above $90,000, while Ethereum (ETH) price also surpassed $3,000.
However, FLOW did not benefit from the market-wide recovery. Data from BeInCrypto Markets shows that the altcoin fell almost 14% over the past 24 hours, ranking as the second biggest daily loser on CoinGecko.
It should be noted that the decline is not limited to today. Like the market as a whole, 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 more than 50% in a single day, falling to a new all-time low of $0.079 on Binance. Major South Korean exchanges Upbit and Bithumb have suspended FLOW deposits and withdrawals
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“Flow (FLOW) has been designated as a commercially prudent asset by the 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 the procedures following the commercially prudent designation,” reads the translation of Upbit’s notice.
Flow Foundation enters recovery phase after $3.9M 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 brought the incident under control, preventing further losses.
The Flow Foundation stressed that the incident did not compromise existing users’ balances.
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“The funds confirmed withdrawn represent a manageable amount that does not threaten network solvency or user funds.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 before the exploit. However, after receiving substantial feedback from validators and the developer community, the Foundation has revised its approach and introduced a new remediation plan.
The approach avoids rollback or reorganization of the network, aiming to preserve legitimate user activity. According to the foundation, more than 99.9% of accounts are unaffected and will be fully operational upon relaunch.
“Upon network restart, accounts identified as recipients of fraudulently created tokens will be temporarily restricted as a precautionary measure… Flow’s core development team will provide a software upgrade to node operators. This software upgrade will temporarily allow the Community Governance Board to remediate fraudulent assets,” the post added.
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The Foundation then 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 point.
This development reflects the team’s continued efforts to restore normal operations, although it remains uncertain whether the recovery process will be sufficient to restore market confidence and support a price rebound.
