Liquid Network Breach: 4,000 BTC Stolen Amidst Strongest Bitcoin ETF Inflows
A significant amount of Bitcoin has been taken from the Liquid Network, with approximately 4,000 BTC, worth around $319 million, withdrawn. The alleged 'white hat' hackers claimed responsibility for the heist and left a message stating they are 'whitehats' who can be contacted on-chain.
The incident occurred after an unverified OP_RETURN message was sent to the network. According to Liquid Network's post, the funds were withdrawn via the SideSwap PAK (Peg-out Authorization Key), but that key was not compromised, nor were any others. The team has temporarily disabled bridge nodes to prevent further transactions and is working to identify the security hole.
Crypto analyst DBCrypto pointed out that the coins have not been mixed or laundered, which suggests a 'white hat' extraction rather than a theft. However, this incident raises questions about the security of the sidechain and whether 11 of 15 functionaries signed off on the withdrawal, or if the whitelist built to prevent such incidents failed.
Meanwhile, Bitcoin ETF inflows have seen their strongest three-week stretch in 2026, with $3.8 billion pouring into US spot Bitcoin ETFs. The funds attracted $986.9 million in the week ending Friday and have accumulated a total of $55.6 billion in net inflows.