Blockchain abandons rollback plan as remediation and investigation continue
The Flow blockchain is advancing its recovery process following a $3.9 million exploit, shifting focus to restoring core functionality while raising concerns about suspicious token activity on a centralized exchange. The incident has reignited debate around decentralization, exchange oversight, and crisis response in blockchain ecosystems.
Flow confirmed it has entered phase two of its remediation plan, marking what it described as “significant progress.” Developers have now identified a method to restore Ethereum Virtual Machine (EVM) functionality, while remediation on Flow’s native Cadence chain continues in parallel.
The recovery effort is being carried out through validator-authorized cleanup transactions, with all activity publicly auditable on-chain. This approach follows criticism of an earlier proposal to roll back the blockchain, a move many community members argued would undermine decentralization and set a risky precedent.
Exchange Activity Raises Compliance Concerns
In its post-incident review, Flow highlighted concerns over large token movements on a single centralized exchange. According to the foundation, one account deposited 150 million FLOW tokens—around 10% of total supply, rapidly converted a portion to Bitcoin, and withdrew more than $5 million before the network halt.
Flow stated this pattern suggested AML and KYC enforcement failures, potentially shifting financial risk to unsuspecting users.As technical recovery continues, the incident underscores the growing importance of exchange accountability and transparent remediation in safeguarding blockchain ecosystems.
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