Liquid Network has paused its sidechain activity after approximately 4,000 BTC, worth around $320M, was withdrawn from its federation wallet.
What makes this incident interesting is that Liquid says the SideSwap PAK itself was not compromised, and no other keys were reported compromised. The network has not yet disclosed the root vulnerability behind the withdrawal.
An onchain message from the parties involved reportedly said: we are whitehats. contact us on chain.
Liquid has since disabled bridge nodes and notified exchanges to suspend LBTC deposits and withdrawals. Other assets on Liquid, including USDT, DePix and RWAs, were reported unaffected.
The bigger question for me is simple: if the authorization key wasn’t compromised, what allowed such a large withdrawal to happen?
#Bitcoin #LiquidNetwork #CryptoSecurity
What makes this incident interesting is that Liquid says the SideSwap PAK itself was not compromised, and no other keys were reported compromised. The network has not yet disclosed the root vulnerability behind the withdrawal.
An onchain message from the parties involved reportedly said: we are whitehats. contact us on chain.
Liquid has since disabled bridge nodes and notified exchanges to suspend LBTC deposits and withdrawals. Other assets on Liquid, including USDT, DePix and RWAs, were reported unaffected.
The bigger question for me is simple: if the authorization key wasn’t compromised, what allowed such a large withdrawal to happen?
#Bitcoin #LiquidNetwork #CryptoSecurity
