FLOW Plunges After Flow Foundation Investigates Potential Mainnet Security Incident
The Flow Foundation has opened an investigation into a potential mainnet security issue affecting the Flow network that powers NFT platforms such as NBA Top Shot. The announcement (Dec 27, 2025) triggered immediate market panic: FLOW plunged from about $0.17 to $0.11 (a >35% intraday drop) and has lost roughly 69–70% over 90 days. Spot trading largely remained available, but major South Korean exchanges — Upbit, Bithumb and Coinone — suspended on‑chain FLOW deposits and withdrawals under DAXA guidance and issued risk warnings; they say customer balances remain secure. Trading volume spiked to roughly $164 million (CoinMarketCap) as volatility and intraday liquidity surged. Flow engineering teams are working with network partners to assess the issue; no confirmed exploit or on‑chain losses have been reported so far and details and scope remain unconfirmed. Key takeaways for traders: elevated tail risk for FLOW until a technical postmortem is published, higher intraday volatility and volume, potential withdrawal delays on some venues (regional liquidity constraints), and the possibility of further downside if an exploit is confirmed.
Bearish
The news is bearish for FLOW. The initiation of an official investigation into a potential mainnet security issue creates immediate uncertainty and elevated tail risk for the token. Market reaction — a >35% intraday drop and ~70% 90‑day loss, coupled with a surge in trading volume — shows panic selling and short‑term deleveraging. Exchange actions (suspension of deposits/withdrawals on major Korean venues) impose regional liquidity constraints that can exacerbate price declines and increase volatility. In the short term, traders should expect continued high intraday volatility, possible rapid directional moves, and constrained liquidity on affected exchanges. In the medium to long term, the direction depends on the investigation outcome: confirmation of a exploit or loss would deepen the bearish case and likely prolong price weakness and reduced confidence; a clear technical postmortem with fixes and no asset loss could stabilize sentiment and enable recovery. Absent definitive findings, risk premia will remain elevated, keeping downward pressure on FLOW relative to normal market conditions.