Flow Activates Isolated Recovery After $3.9M Hack; FLOW Plunges 40%

Published: 2025-12-29 23:33:10 |

Flow blockchain has initiated an isolated recovery after a $3.9 million exploit that prompted validators to approve a targeted software upgrade. The phased plan isolates addresses linked to the attacker while preserving legitimate on-chain activity. Validators reached consensus on the upgrade and testing is underway ahead of Phase 1 deployment; full chain operations will resume only after tests complete. An earlier proposal to roll back the chain to a pre-hack state was abandoned after exchanges, partners and ecosystem participants (including Dapper Labs and the Flow Foundation) opposed a rewind that would disrupt uninformed users. Security analysts noted the attacker bridged stolen funds off-chain into Ethereum and other assets, making a rollback ineffective. The incident caused a sharp market reaction: FLOW fell about 40% to roughly $0.10. Traders should watch test outcomes, Phase 1 rollout and any further on-chain address restrictions for signs of network stability and token-price recovery. Primary keywords: Flow, isolated recovery, FLOW token, hack, blockchain security.

Bearish

The news is likely bearish for FLOW in the short term. The hack and resulting 40% price drop reflect immediate loss of confidence and increased sell pressure. Although an isolated recovery reduces systemic disruption compared with a full rollback, uncertainty remains: testing must complete, Phase 1 must deploy successfully, and on-chain restrictions (and any legal or exchange responses) could affect liquidity and trading access. The attacker bridging funds to Ethereum also reduces the chance of full fund recovery, which can further weigh on sentiment. Over the medium to long term, successful containment and demonstrated network resilience could help restore confidence, especially if developers and validators execute the recovery cleanly and communications remain transparent. However, persistent uncertainty, potential further exploits in 2025, and reputational damage mean recovery of token price is not guaranteed and could be slow.