Flow Blockchain Halts After $3.9M Exploit Incident

The Flow blockchain halted operations after a $3.9 million security breach in its execution layer on December 27, 2025. Validators paused the network to prevent further losses, initiating the phased recovery with Cadence activity restored.

The Flow Foundation’s proposal to reverse some transactions faced backlash, leading to its abandonment. Key players included network validators and the deBridge team, who criticized the plan for potential risks.

Alex Smirnov, Co-founder, deBridge, said, “Reversing finalized transactions…would have introduced the risk of duplicated balances and operational disruptions for users who acted in good faith.” source

This incident affected wrapped tokens, stablecoins, FLOW tokens, and NFTs, causing a 42% drop in the FLOW token’s value. Major exchanges paused transactions while awaiting further restoration phases.

The fallout highlighted potential vulnerabilities in the protocol’s cross-contract communication. Validators work to ensure network integrity while exchanges and bridges prepare for eventual service resumption.

Flow’s recovery strategy involves phased verification, prioritizing user safety and network stability. Clearing this disruption requires close collaboration between developers and exchanges to restore full operational capacity.

Despite the setback, Flow aims to recover by deploying targeted fixes. The event underscores the importance of robust security measures in the evolving DeFi landscape to protect against future threats.