Flow Advances Remediation Plan After $3.9M Exploit

Remediation Plan Keeps Progressing

Flow Fund is continuing to implement a remediation plan following a $3.9 million exploit that occurred on Saturday, raising concerns about large token movements on a centralized exchange platform. In a post on X on Thursday, Flow announced that it has made "significant progress" in its recovery plan, now entering phase two, which is expected to last several days.

According to the platform, developers have "identified a path to restore EVM [Ethereum Virtual Machine] functionality" while addressing its non-EVM chain, Cadence. "The Community Governance Council continues to execute cleanup transactions under limits authorized by validators, following established precedents for recovering digital assets," stated Flow. "All remediation activities are audited publicly on the blockchain through block explorers. Remediation for Cadence and EVM will now occur simultaneously."

This update follows Flow’s abandonment of a previously proposed implementation plan that involved reverting to an earlier version of the blockchain. Many users criticized this move, arguing that a rollback would pose risks concerning decentralization and security. As part of its post-mortem report, Flow stated that it is "concerned about how a change managed this incident," adding that the unidentified cryptocurrency company had not responded to requests regarding trading patterns.

Although the foundation did not specifically name the exchange, some users speculated that it might be referring to Binance. "Within hours of the exploit, a single account deposited $150M $FLOW, roughly 10% of the total token supply, converted a substantial portion to BTC, and withdrew over $5M within hours before the network was halted," Flow stated, referring to the activities on the unidentified exchange.

"This transaction model represents an AML/KYC failure that shifted financial risk onto users who unwittingly bought fraudulent tokens." Cointelegraph reached out to the Flow Foundation and Binance for comments but received no response by the time of publication.

On the same day, Trust Wallet reported that its browser extension was compromised in a Christmas Day exploit, resulting in losses of $7 million. Former Binance CEO Changpeng Zhao stated at the time that funds lost from thousands of affected wallet addresses would be covered. By Monday, the company claimed to have identified 2,596 compromised addresses but had received approximately 5,000 restitution requests.