Flow Network Investigates Potential Security Incident

The Flow Foundation says it is investigating a potential security incident that could impact the Flow blockchain.

In a public update, the foundation confirmed that engineering teams are actively working with network partners to identify the issue and stabilize the network, adding that new information will be shared as soon as it is confirmed.

The announcement immediately rattled markets.

FLOW, the network’s native token, saw sharp selling pressure shortly after the statement was released. According to Binance market data, FLOW plunged from $0.17 to a low of $0.079 within hours before rebounding slightly to around $0.10, marking a 24-hour decline of 42.61%.

The Flow Foundation has not yet confirmed whether the issue stems from a smart contract exploit, validator disruption, or infrastructure vulnerability. For now, the investigation remains ongoing, with the team emphasizing caution as facts are verified.

FLOW Price Crashes As Exchanges React

The market response was swift and unforgiving.

Major Korean exchanges Upbit and Bithumb moved to suspend deposits and withdrawals of FLOW, citing potential risks while the investigation unfolds. The suspensions further intensified sell pressure as liquidity tightened and uncertainty spread.

Adding to the tension, South Korea’s Digital Asset Exchange Association (DAXA) issued a “trading risk warning” for FLOW. Such warnings often act as a red flag for retail traders, historically accelerating capital flight during moments of instability.

The combined effect pushed FLOW into one of its steepest single-day declines in years. At its worst point, the token was down more than 50% from intraday highs, wiping out millions in market value.

Despite the severity of the move, no confirmed exploit has been disclosed so far. The selloff appears driven more by fear than by verified technical failure.

Panic Builds Beyond The Security Probe

While the investigation remains unresolved, some observers argue that today’s crash goes deeper than a single announcement.

Crypto analyst Crypto Feras pointed to a broader confidence breakdown rather than a direct protocol failure. According to his assessment, nothing has happened directly to the FLOW token or its core team, but the ecosystem is still reeling from the aftershock of Blocto Wallet’s shutdown.

The Flow ecosystem, long tied to consumer-facing NFTs, gaming platforms, and wallets, has struggled to regain momentum after years of declining token value. The latest uncertainty acted as a match on already dry tinder.

Traders, already on edge, rushed to exit positions. Liquidity evaporated. Forced selling followed.

Blocto Shutdown Continues To Haunt Flow

The roots of the current panic trace back to December, when Blocto Wallet, one of Flow’s most prominent ecosystem partners, announced it would shut down core services.

On December 12, 2025, Blocto revealed plans to cease operations for its flagship products effective December 18, 2025. The shutdown included the Blocto Wallet, BloctoSwap decentralized exchange, and Blocto Teleport cross-chain bridge. Only node staking operations were spared.

Blocto cited unsustainable financial losses exceeding $5.5 million, directly attributing the damage to FLOW’s prolonged price collapse. Once trading near $40 at its 2021 peak, FLOW had fallen below $0.30 by late 2025, eroding revenue models tied to user activity and on-chain volume.

Blocto’s exit removed a critical piece of infrastructure from the Flow ecosystem almost overnight. For many users, it marked the first visible sign that long-term confidence was breaking.

Liquidity Crunch And Forced Selling Take Hold

The aftermath of Blocto’s closure has continued to ripple through the ecosystem.

As users rushed to exit wallets, unwind DeFi positions, and migrate assets, liquidity thinned across Flow-native platforms. That pressure intensified today, culminating in what analysts describe as a liquidity-driven cascade rather than a fundamentals-based repricing.

FLOW’s 39.6% crash to around $0.105 occurred amid forced sales, exchange suspensions, and heightened fear around a potential security issue. With fewer buyers willing to step in, prices slipped rapidly through key support levels.

This environment amplifies volatility. Even modest sell orders can trigger outsized moves when market depth disappears. In that sense, today’s decline reflects a system under stress, not necessarily a protocol failure.

What Comes Next For Flow

For now, the Flow Foundation’s response will be critical.

The team has promised transparency as the investigation progresses. Market participants are watching closely for confirmation on whether the issue involves validators, network infrastructure, or external dependencies.

Short term, exchange restrictions and regulatory warnings are likely to keep pressure on the token. Any delay in communication could further damage confidence.

Longer term, Flow faces a more fundamental challenge. The network must rebuild trust after years of price erosion, ecosystem contraction, and now renewed uncertainty.

The Flow blockchain was once positioned as a consumer-friendly alternative for NFTs and gaming. Today, it is navigating survival mode. Whether this episode becomes a temporary shock or a turning point depends on what the investigation reveals, and how decisively the foundation responds.

For now, markets remain tense. Traders remain cautious. And FLOW continues to trade under heavy scrutiny as the ecosystem waits for clarity.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news!