Altcoin Hit by Major Hack Blames Cryptocurrency Platforms – Here Are the Official Statements

The Flow ecosystem has come to the forefront with a significant claim following a security breach that occurred on December 27th.

The Flow Foundation has revealed that vulnerabilities in the AML/KYC (Know Your Customer) processes of some cryptocurrency exchanges have led to a large-scale token movement and pose significant financial risks to users.

According to a statement by the Flow Foundation, just hours after the vulnerability was exploited, a single account deposited 150 million FLOW tokens into the trading platform. This amount represents approximately 10% of the total FLOW supply. A significant portion of the deposited tokens was converted to BTC, and over $5 million worth of assets were withdrawn in the short time before the network was shut down.

The Flow Foundation argued that this unusual transaction pattern indicates serious vulnerabilities in the platforms AML/KYC controls. The statement explained that these weaknesses shift the financial risk onto users who unknowingly purchase counterfeit or problematic tokens.

Weekly chart showing the decline in FLOW price.

The foundation did not name the cryptocurrency platform in question, but an examination of the hack details reveals that the assets were converted to Bitcoin via Chainflip and THORChain.

According to the statement, following the incident, the Flow Foundation and its forensic analysis partners coordinated with global trading platforms to protect users and restore operations. This included collaboration with Kraken, Coinbase, and Upbit, with Kraken having already resumed its services.

Forensic analysis teams detected significant deviations from normal market behavior in the FLOW trading pair on the platform, both before and after the network shutdown.

*This is not investment advice.