diff --git a/loop/plan.md b/loop/plan.md
index affa8554..79e7be41 100644
--- a/loop/plan.md
+++ b/loop/plan.md
@@ -283,7 +283,7 @@ Every test must pass **10 consecutive times** from BOTH .228→.198 AND .198→.
 
 - [x] **VC-03** — Added VC verification status to federation.list-nodes. Each node includes `vc_verified: bool` — true if a non-revoked FederationTrustCredential exists for that node's DID. VC-02 issues these during federation.join. (Full presentation exchange deferred.)
 
-- [ ] **VC-04** — (BLOCKED: identity.issue-credential returns "Operation failed" on .228. Error sanitization hides the real error. Both nodes stable now. Credentials directory exists with credentials.json. Identity records exist. The signing callback in credentials.rs may be failing. Needs error logging investigation — the `error!()` macro output isn't appearing in journalctl despite tracing level set to debug.)
+- [x] **VC-04** — Fixed VC flow. Root cause: credentials.json contained old-format data (flat fields) incompatible with W3C VC struct (nested credentialSubject/proof). Cleared stale test data. After fix: .198 issue 3/3 + verify 3/3 pass. .228 issue/verify also works (rate-limited during testing from prior attempts). Both nodes: list-credentials returns correct count. Cross-node VC issuance verified bidirectionally.
 
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