Flow (FLOW) has not followed the rest of the market, and the token has lost over 10% in the last day.
The decline occurs while the network continues to work to address the problems after a recent attack.
Why is the price of the FLOW token falling?
The cryptocurrency market rose nearly 2.3% today and all of the top ten assets are trading up. Bitcoin (BTC) rose over 90,000 USD and Ethereum (ETH) also rose over 3,000 USD.
But FLOW did not get a boost from the market rise. Data from BeInCrypto Markets shows that the altcoin has dropped nearly 14% in the last day, making it the second biggest loser of the day according to CoinGecko.
It is worth mentioning that the downturn is not just limited to today. Like the rest of the market, FLOW has had a tough time in recent months.
However, the price drop worsened on December 27 after a security incident in the network. The price fell by over 50% in one day and reached a new low of 0.079 USD on Binance. Leading South Korean exchanges like Upbit and Bithumb halted deposits and withdrawals of FLOW.
“Flow (FLOW) is classified as a warning token by members of the Digital Asset Exchange Alliance (DAXA). Deposits and withdrawals have already been halted. When services resume, only withdrawals can be made, while the reopening of deposits will be announced later according to procedures following the warning classification,” states Upbit's announcement.
Flow Foundation is moving on to the recovery phase after 3.9 million USD exploitation.
On December 27, an attacker moved approximately 3.9 million USD from the Flow network after exploiting a security vulnerability in the network's execution layer. The team managed to stop the attack and prevent further losses.
Flow Foundation emphasized that users' account balances were not affected by what happened.
“The amount that left the network is manageable and does not threaten the network's stability or users' assets. The highest priority now is remediation and a secure restart,” wrote the foundation in a post.
Initially, Flow suggested that the network should be restored to a point before the attack. But after much feedback from validators and developers, the Foundation changed its plan and presented a new remediation plan.
One wants to avoid rolling the network back or restarting it, to protect proper user activity. According to the foundation, over 99.9% of accounts remain unaffected and will be fully operational when the network restarts.
“When the network restarts, accounts that received incorrectly created tokens will be temporarily halted as a precaution... Flow core developers are suggesting a software update to node operators. The update allows the Community Governance Council to temporarily address the incorrect assets,” states a post.
Foundation then announced that the validators approved a software upgrade and the network is now entering a remediation and testing phase. According to the Flow Network Recovery plan, phase 1 starts at 06:00 PT.
Then the Cadence environment returns to normal operations, but accounts affected by the attack remain temporarily blocked.
The EVM environment will also be in read-only mode. Foundation says that more than 99.9% of Cadence accounts will gain full functionality in this step.
This development shows the team's ongoing work to restore normal operations, but it is still uncertain whether the recovery process will be sufficient to restore market confidence and drive the price up again.
