Flow freezes NFT loan repayment after hack incident

The settlement activities for NFT loans on the Flow blockchain have been suspended, causing both debt repayment and default recognition to be frozen amid the ecosystem still recovering from the exploit incident on 12/27. Due to the decision to suspend the Cadence execution environment until 12/29 morning, many borrowers were unable to transfer tokens or perform transactions on time, leading to some loans maturing without the opportunity for repayment. The Flowty NFT lending platform stated that during the network freeze, 11 loans matured, of which 8 were marked as defaults, 1 was repaid through an automatic mechanism, and 2 could not be settled due to account restrictions related to the incident.

Although the Flow blockchain has resumed operation, many core functions of the ecosystem, including token swaps, remain disrupted, making it difficult for borrowers to access assets for repayment. In response, Flowty has decided to suspend all loan settlements, putting maturing contracts into a “paused” state to avoid forced defaults and the risk of losing unrecoverable NFTs. Simultaneously, the platform has also disabled new loans to limit the risk of wider spread. The FLOW token has dropped more than 50% since the incident, currently trading around $0.086.