Catenaa, Monday, January 05, 2026- NFT-backed loan borrowers on the Flow blockchain remain unable to settle maturing loans after a late December exploit forced a network pause that disrupted repayments and triggered defaults, according to platform disclosures.
The incident followed a December 27 exploit that led the Flow Foundation to halt the blockchain’s Cadence execution environment until the morning of December 29.
While the foundation said user balances were not affected, the pause blocked transactions, leaving borrowers unable to repay loans as they came due.
Flow-based NFT lending platform Flowty said 11 loans matured during the shutdown.
One loan was repaid through an automated process, eight defaulted, and two could not settle because of account restrictions linked to the exploit.
The defaults occurred while borrowers lacked the ability to move tokens or interact with smart contracts.
Although the network has since resumed operations, parts of the Flow ecosystem remain impaired.
Token swapping services are still largely unavailable, limiting borrowers’ ability to obtain the assets required to repay outstanding loans even after the pause ended.
In response, Flowty said it halted settlement on all loans at 2:15 p.m. ET on December 30.
Loans reaching maturity during the halt will neither settle nor default and will instead remain outstanding until further notice.
The platform said it plans to introduce a defined repayment window once broader network functions stabilize, without offering a timeline.
The decision freezes activity for both lenders and borrowers. Interest will not accrue on paused loans, and borrowers cannot reclaim pledged NFTs.
Flowty also disabled new loan listings and removed existing offers to reduce further exposure.
The disruption weighed heavily on the market. Flow’s native token fell about 40% following the exploit and slid another 17% to roughly $0.086 by press time, based on market data.
