Flow probes a potential security incident as the $FLOW token drops over 40%, triggering exchange halts and market volatility.
Author: Tanishq Bodh
December 27, 2025 – On December 27, 2025, the Flow Foundation disclosed that it is investigating a potential security incident affecting the Flow blockchain. The announcement, shared late on X, immediately rattled markets and triggered a sharp sell-off in the network’s native token, $FLOW. As uncertainty spread, investors reacted swiftly, pushing the token into one of its steepest single-day declines this year.
The Flow Foundation stated that its engineering teams are actively working with network partners to contain the issue. However, as of December 28, the foundation has not released technical details, leaving the scope and impact of the incident unclear. Consequently, speculation intensified across social media and trading desks.
Following the announcement, $FLOW plunged from around $0.17 to a low near $0.079 on Binance, marking a drop of more than 40% within hours. Although the token later rebounded modestly to roughly $0.10, volatility remained elevated throughout the day. Meanwhile, 24-hour trading volume surged to nearly $190 million, signaling widespread panic selling.
This move wiped out hundreds of millions of dollars in market capitalization. Moreover, the decline compounded Flow’s longer-term losses, with the token now trading more than 99% below its 2021 all-time high. As a result, market sentiment around the ecosystem deteriorated rapidly.
In response to the uncertainty, major South Korean exchanges moved to limit exposure. Upbit, Bithumb, and Coinone temporarily suspended $FLOW deposits and withdrawals, citing precautionary measures. At the same time, the Digital Asset Exchange Association (DAXA) issued a trading risk warning, which further pressured prices.
On-chain analysts also flagged suspicious activity. Reports pointed to a previously dormant wallet that allegedly minted large amounts of $FLOW before draining liquidity pools, with estimated losses exceeding $4 million. Although some community members labeled the incident a “hack” or even suggested an exit scam, no evidence has confirmed those claims so far.
Flow operates as a layer-1 blockchain designed for consumer-facing applications, including NFTs and gaming platforms such as NBA Top Shot. The network raised roughly $725 million in ecosystem funding in 2022 and has since shifted its focus toward consumer DeFi and broader utility.
However, the current probe highlights ongoing security risks across the sector. In 2025 alone, hackers stole more than $3.4 billion from crypto platforms globally, according to industry estimates. Therefore, transparency and timely communication will play a critical role in restoring confidence. If investigators contain the issue quickly, Flow could stabilize. Still, prolonged uncertainty may weaken trust across its NFT and DeFi ecosystem.
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