In the statement, SpaceX said an "anomaly" occurred during static fire tests of its abort engines on the Crew Dragon spacecraft.
The so-called "anomaly" occurred during testing of the SuperDraco thrusters-part of the Crew Dragon's launch abort system-SpaceNews explained.
Although SpaceX did not disclose at the time what Crew Dragon vehicle was being used for this test, it has now been confirmed that the craft, which is "all but destroyed" was the DM-1 capsule that docked with the International Space Station for four days earlier this year, before returning to Earth and splashing down in the Atlantic Ocean off the Florida coast.
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According to Spaceflight Now, the test "sent a reddish-orange plume into the sky visible for miles around", suggesting a fairly serious malfunction of the engine systems.
It's not immediately clear just how this incident will affect SpaceX's timeline for launching crew. "Our teams are investigating and working closely with our NASA partners", the company further added.
"Ensuring that our systems meet rigorous safety standards and detecting anomalies like this prior to flight are the main reasons why we test", SpaceX said.
In March, the privately owned SpaceX successfully completed its mission of sending an unmanned capsule to the International Space Station and returned safely to Earth, a mission seen as crucial to NASA's plans to resume human space flight from USA soil.
Crew Dragon, also known as Dragon 2, is a reusable spacecraft designed as a successor to the Dragon space freighter. A crewed launch was supposed to take place as soon as July, but it seems likely the timeline will change for that as well. NASA had only reserved Soyuz seats through December. That Dragon was slated to be reused for the upcoming in-flight abort test. Officials had previously said the first flight with astronauts could be as early as this summer, but the schedule is under review.