Buddy chats in FlashChat are end-to-end encrypted. The key that opens them lives only on your phones; FlashChat's servers store scrambled text they cannot read. That is also why a new phone has to get the key from you, never from us. This page is the whole story in five minutes.
Your account has one chat key. Every phone you use holds a copy of it. A buddy encrypts each message to that key, and only a phone holding it can read the message. Move phones, and the key has to move with you. There are three ways it can travel, and all three keep the server blind.
Log in on the new one. If "chats follow you" was on (it is, from the moment you set a password), everything is there. Without a password, the account still comes back through the email sign-in link, but the chats stay locked: nobody, including FlashChat, can open them without the key.
Logging in on a new phone never signs the old one out by itself. To cut the lost phone off, open Me → Settings → Account → Devices → Lost a phone? → Sign out other phones on any phone you still have. Every other phone is signed out the next time it connects, and loses your buddies and chats there. The phone you pressed it on stays signed in.
You see this on a message when it was encrypted to a key this phone doesn't hold. Usually the phone joined the account through the email link, or it took a key from a phone that had already fallen out of step. Two ways out, both in the banner above the chat:
A buddy's security code changes when they switch phones or start fresh. If they told you, tap Accept. If it is a surprise, tap Verify and compare the numbers in person or on a call before you continue. Your messages keep flowing either way; the banner is there so you can check.
No. Messages are encrypted on your phone with a key the server never sees. What leaves your phone is scrambled text.
A copy of your chat key, locked with your password before it leaves the phone. The server keeps the locked copy and hands it back when you log in; only your password opens it.
A new phone then needs a code from a phone you already have. Nothing changes on the phone you are using.
No. Every phone that already has your account keeps working. Use Sign out other phones under Devices for that.