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Flow Foundation Probes Potential Security Incident on Flow Network

Flow Foundation Probes Potential Security Incident on Flow Network

Flow Foundation confirms Dec. 27 FLOW token exploit involving 150M tokens and $5M+ withdrawals, highlighting AML/KYC gaps and unusual activity before network halt.

BTC
FLOW

Summary

Flow Foundation’s latest statement on the Dec. 27 incident confirms a single account deposited approximately 150 million FLOW (~10% of total supply) onto one exchange, converted much into Bitcoin, and withdrew over $5 million before the network was paused. The breach exposed deficiencies in AML/KYC procedures and abnormal trading patterns. Previous updates noted cooperation with exchanges including Kraken, Coinbase, and Upbit, with Kraken resuming services, and originally reported losses of $3.9 million later revised to over $5 million.

Terms & Concepts
  • AML/KYC: Anti-Money Laundering/Know Your Customer controls used to prevent illicit activity and verify customer identities, typically enforced by exchanges and financial institutions.
  • FLOW: The native token of the Flow blockchain, used for transaction fees, staking, and network participation.
  • BTC: Ticker symbol for Bitcoin; used here as the asset received when FLOW was swapped before the network halt.