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Flow Scraps Rollback After $3.9M Exploit, Begins Phased Restart With Targeted Token Burns

Partner concerns over unbacked cross-chain assets prompted the foundation’s pivot.

Overview

  • Validators approved a software update and brought the network back in a read-only testing mode ahead of a phased restoration.
  • The remediation targets destruction of fraudulently minted tokens and imposes restrictions on flagged accounts to preserve legitimate activity.
  • Investigators identified the attacker’s Ethereum wallet and traced laundering attempts through Thorchain and Chainflip, with freeze requests sent to issuers and exchanges.
  • The foundation said existing user balances were not accessed, as market data showed a FLOW price drop, temporary exchange suspensions, and a TVL decline that partially rebounded within 24 hours.
  • Dapper Labs backed the revised plan, and coordination with bridges, custodians, and validators continues to resolve operational edge cases.