Liquid Network said purported white-hat hackers withdrew about 4,000 BTC, worth roughly $320 million, from its federation wallet, forcing the Bitcoin sidechain to pause operations.
The withdrawal represented around 95% of Liquid’s reported bitcoin reserves, which stood at approximately 4,200 $BTC
before the incident.
Liquid said the funds were withdrawn through the SideSwap Peg-out Authorization Key (PAK), but maintained that the key itself had not been compromised. An onchain message linked to the transaction stated: “we are whitehats. contact us on chain.”
Blockstream, Liquid’s technology provider, is attempting to contact those responsible through an onchain signed message. The network has also notified exchanges, many of which have suspended LBTC deposits and withdrawals.
Liquid temporarily disabled bridge nodes, effectively pausing the sidechain until the issue is resolved. Other assets issued on Liquid, including USDT, DePix and real-world assets, were said to be unaffected.
The withdrawal represented around 95% of Liquid’s reported bitcoin reserves, which stood at approximately 4,200 $BTC
before the incident.
Liquid said the funds were withdrawn through the SideSwap Peg-out Authorization Key (PAK), but maintained that the key itself had not been compromised. An onchain message linked to the transaction stated: “we are whitehats. contact us on chain.”
Blockstream, Liquid’s technology provider, is attempting to contact those responsible through an onchain signed message. The network has also notified exchanges, many of which have suspended LBTC deposits and withdrawals.
Liquid temporarily disabled bridge nodes, effectively pausing the sidechain until the issue is resolved. Other assets issued on Liquid, including USDT, DePix and real-world assets, were said to be unaffected.