Liquid Network Hacked: $320M Worth of Bitcoin Stolen

Liquid Network, a Bitcoin sidechain used by cryptocurrency exchanges and other market participants, has halted activity after roughly 4,000 BTC worth about $320 million was withdrawn from its federation wallet.

The withdrawal was processed through SideSwap, a platform authorized to handle Liquid peg-outs. Importantly, Liquid said the SideSwap Peg-out Authorization Key and other keys were not compromised, making this incident different from many conventional crypto hacks.

The network has since disabled its bridge nodes and halted new transactions while federation members investigate the incident. The individuals behind the withdrawal have claimed to be white-hat hackers, saying the funds will be returned once the underlying vulnerability has been fixed.