Liquid Network pauses after $320 million BTC withdrawal by alleged white‑hat hackers
Network pause after large BTC withdrawal
Liquid Network announced that roughly 4,000 bitcoin (about $320 million) were taken from its federation wallet by individuals calling themselves white‑hat hackers. The incident caused the Bitcoin sidechain to be paused, and several exchanges stopped LBTC deposits and withdrawals.
Key details
- 4,000 BTC (~$320 M) withdrawn from Liquid’s federation wallet.
- Withdrawal used the SideSwap PAK (Peg‑out Authorization Key); the key itself was not compromised.
- Liquid’s bridge nodes were disabled to stop new transactions.
- Other assets on Liquid, such as USDT and DePix, were not affected.
- Exchanges were notified and many have suspended LBTC activity.
Liquid Network’s statement
In a post on X on September 6, Liquid said Blockstream, its technology provider, is trying to contact the parties through an on‑chain signed message. The statement did not name the hackers or guarantee that the funds will be returned.
What is confirmed
- The security incident occurred and involved about 4,000 BTC.
- The SideSwap PAK was used for the withdrawal.
- The sidechain is currently paused and bridge nodes are offline.
- Other tokens on the network remain operational.
Unclear points
- Whether the withdrawn funds will be returned.
- The exact vulnerability that allowed the withdrawal.
- When the network will be restarted.
Potential impact
LBTC is a token that represents locked Bitcoin on the Liquid sidechain. Pausing the sidechain stops confidential and fast Bitcoin transfers that rely on LBTC, affecting users and services that depend on these features.
Next steps
Liquid and Blockstream are working to resolve the issue and restore normal operations. They have asked the alleged white‑hat hackers to contact them on‑chain.
