Flow Abandons Blockchain Rollback Plan Following $3.9 Million Exploit and Community Backlash
Flow has abandoned its planned rollback of the blockchain following a $3.9 million exploit after pushback from the ecosystem, which argued that the rollback would undermine decentralization and introduce operational risks.
Instead of a chain reorganization, the network will restart from the last sealed block before December 27, preserving legitimate transaction history.
The revised recovery strategy involves targeting fraudulent assets through account restrictions and token destruction, although recovery of stolen funds remains uncertain.
This approach requires an extraordinary governance measure: a temporary software upgrade that grants service-account powers. Validators must approve this step, and the powers will be revoked after the remediation process.
The FLOW token has been negatively impacted by the incident, falling roughly 42% since the exploit.
The exploit targeted a vulnerability in Flow's execution layer but did not compromise existing user balances.
Recovery of funds will depend on where the stolen assets ended up, such as exchanges, and the willingness of counterparties to cooperate. Furthermore, some assets may have moved to Bitcoin, complicating recovery efforts due to legal challenges.
