Blockstream's $320M Bitcoin Heist: Hackers Bypass Emergency Path

Roughly 4,000 BTC, worth about $320 million, left Blockstream's Liquid Federation wallet after it was hacked on Sunday afternoon.

The attacker used a regular peg-out request to drain the funds, bypassing the network's emergency path and using exactly 11 valid signatures on the federation's 11-of-15 branch.

The hacker's address published an OP_RETURN message claiming to be 'whitehats' and providing contact information. SideSwap blamed the incident on faulty Liquid Bitcoin (LBTC) originating from a third-party 'Elements bug.'

Liquid Network confirmed the incident, suspending LBTC deposits and withdrawals, and Mempool.space logged an unauthorized BTC withdrawal in its real-time audit of federation holdings.