Nearly 4,000 BTC Stolen from Liquid Network as Hackers Claim to Be White-Hats
A major security breach occurred on the Bitcoin sidechain Liquid Network when approximately 4,000 BTC—valued at around $320 million—was withdrawn from a federation wallet. The network confirmed that purported white-hat hackers accessed and took control of these funds through the SideSwap Peg-out Authorization Key mechanism without compromising any keys themselves. In response, exchanges have paused or are preparing to pause LBTC deposits and withdrawals while Liquid halts bridge activity for investigation. The attackers left on-chain messages identifying as ethical hackers and suggested they may return most of the stolen Bitcoin once a vulnerability is resolved. However, this promise remains unverified by Liquid Federation members who continue working to restore network operations. The incident has raised concerns about sidechain bridges and pegged Bitcoin systems' security assumptions. The situation highlights ongoing risks in blockchain infrastructure as well as potential vulnerabilities within decentralized finance (DeFi) ecosystems.
Tickers: $BTC
Topics: Bitcoin crypto security hacking Liquid Network sidechains