Flow (FLOW) was left out of the broader market rally, with the token seeing a double-digit drop over the past 24 hours.
The reduction comes as the network continues its remediation efforts after suffering a recent vulnerability.
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Why is the FLOW token price going down?
The cryptocurrency market is up almost 2.3% today, with the top 10 assets trading in the green. Bitcoin (BTC) rose above $90,000, while Ethereum (ETH) price also surpassed $3,000.
However, FLOW did not benefit from the market-wide rally. Data from BeInCrypto Markets shows that the altcoin has fallen almost 14% in the last 24 hours, ranking as the second biggest daily loser on CoinGecko.
It is worth noting that the decline is not limited to today. Like the broader market, FLOW has faced challenges in recent months.
However, the decline intensified on December 27 after the network suffered a security incident. The price plummeted more than 50% in a single day, falling to a new all-time low of $0.079 on Binance. Top South Korean exchanges Upbit and Bithumb suspended FLOW deposits and withdrawals
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“Flow (FLOW) has been designated as a trading precautionary 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 the procedures following the trading precautionary designation,” reads the translation of Upbit’s notice.
Flow Foundation moves into recovery phase after $3.9 million exploit
On December 27, an attacker removed approximately $3.9 million in assets from 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 the balances of existing users.
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“The confirmed funds out represent a manageable amount that does not threaten the network’s 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 revised its approach and introduced a new remediation plan.
The approach avoids a rollback or reorganization of the network, with the goal of preserving legitimate user activity. According to the foundation, more than 99.9% of accounts are not affected and will be fully operational at the time of the relaunch.
“Upon restarting the network, accounts identified as recipients of fraudulently minted tokens will be temporarily restricted as a precautionary measure… Flow’s core developer team will propose a software update to node operators. This software update will temporarily allow 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 update and the network moved into a remediation and testing phase. As part of Flow Network’s recovery plan, Phase 1 is scheduled to begin at 6 a.m. Pacific Time.
At that point, Cadence’s environment will return to normal operation, while accounts affected 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 effort to restore normal operations, although it remains uncertain whether the recovery process will be sufficient to rebuild market confidence and support a rally in price.
