Liquid Network Begins External Audit for Peg Out Restoration
The Liquid Network is making progress in restoring its peg out operations after an independent security audit of Elements v23.3.4 began.
The network suspended peg outs following a security incident on September 6, when an attacker created approximately 4,000 unbacked LBTC and withdrew Bitcoin from the federation reserve using Liquid's normal peg out process.
Elements v23.3.4 was released to address the software flaw exploited during the incident, but another issue involving how fields were combined in the cache key remained. The latest external audit adds an additional review of that release before peg outs are switched back on.
The Liquid Federation is updating its Peg out Authorization Key (PAK) list and replacing existing PAK entries to ensure that all Bitcoin receiving keys associated with peg outs are properly secured in cold storage.