Liquid Halted After White-Hat Hackers Withdraw $320 Million in Bitcoin

Liquid Network, a Bitcoin sidechain built and maintained by Blockstream, has temporarily halted its operations after white-hat hackers withdrew approximately $320 million in BTC from the Liquid Federation wallet. The incident occurred on September 6, with about 4,000 BTC being withdrawn through the SideSwap PAK (Peg-out Authorization Key). Notably, neither the key nor any other keys were compromised.

Liquid has notified exchanges and paused LBTC deposits and withdrawals, while bridge nodes have been disabled to prevent new transactions from being submitted. The incident does not affect other Liquid assets such as USDT, DePix, and tokenized real-world assets. Blockstream is working to contact the white-hat hackers through an on-chain signed message, while federation members aim to restore network operations.

Liquid users of Aqua Bitcoin are experiencing functionality impacts due to the ongoing security incident. According to Samson Mow, founder and CEO of JAN3 (the company behind the Aqua wallet), Bitcoin transactions on Aqua remain operational, but further information will be shared as the situation develops.