Liquid Network Loses $320M BTC in Security Incident
The Liquid Network, a Bitcoin-sidechain, has experienced a significant security incident involving the withdrawal of approximately 4,000 BTC, valued at $320 million. The Liquid Federation wallet was reportedly accessed by individuals claiming to be "white-hat hackers," who stated their intention to return the funds once a critical bug is addressed.
Blockstream, a key player in the Liquid ecosystem, is actively communicating with the alleged hackers through on-chain messages. The withdrawals were made using the SideSwap PAK, though Liquid confirmed the key itself was not compromised and other network assets remain unaffected. In response to the breach, crypto exchanges have been notified and are suspending LBTC deposits and withdrawals.
The Liquid Network has temporarily halted operations by disabling bridge nodes, effectively pausing the sidechain while the issue is investigated and resolved. The communication between Blockstream and the hackers has been public, with the latter emphasizing the need for a patch before returning the stolen Bitcoin, citing ongoing risks to the chain.
This is an AI-assisted summary. Original reporting by CryptoPotato.
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