$320 Million in BTC Withdrawn in Unauthorized Liquid Network Peg-out

A recent security breach on the Liquid Network has seen nearly $320 million in BTC withdrawn from its federation's Bitcoin wallet. The unauthorized transaction was carried out by 'white-hat hackers' who left an on-chain message claiming their intentions. However, industry observers caution that such claims should be treated with skepticism until evidence of returned funds is provided.

The breach occurred on September 6 when around 3,996 BTC was moved to a specific Bitcoin address. Liquid Network explained that the transaction was authorized using SideSwap's peg-out authorization key (PAK), but the PAK itself was not compromised, suggesting another part of the control chain may have failed.

Blockchain investigator ErgoBTC pinpointed the specific transaction and confirmed that it was recorded in Bitcoin block 965,783 at 14:28:56 UTC on September 6. The incident highlights the importance of robust security measures within federated bridges and the confidence that users place in such architectures.