Flow Foundation Advances $3.9M Exploit Recovery to Phase Two as Exchange Activity Raises Concerns

On January 1, 2026, the Flow Foundation reported it had progressed its $3.9 million exploit recovery into a second phase, including a plan to restore EVM functionality while continuing Cadence fixes. The network resumed block production on January 2, 2026, but scrutiny has intensified over a centralized exchange account that moved about 150 million FLOW and withdrew over $5 million shortly after the attack. FLOW's price has dropped 53.3% in the past week, and the network’s DeFi TVL has declined to around $72.1 million.