Liquid Network Hacked for $320 Million, Hackers Return Most After Demanding Bug Fix
A massive hack on the Liquid Network, a sidechain used by dozens of exchanges to move funds privately and efficiently, resulted in the loss of $320 million worth of Bitcoin. On September 6, approximately 4,000 out of the 4,200 BTC in the federation wallet were drained, leaving only about 197 BTC behind.
The attackers, who identified themselves as white-hat hackers, returned 3,400 BTC to the federation wallet after Blockstream confirmed that the affected bridge nodes had received security patches. The remaining 598 BTC, worth around $47 million, was kept by the hackers.
Security specialists have questioned whether the term 'white-hat hacker' is accurately applied in this case, as exploiting a vulnerability and draining funds can be considered extortion under US law, carrying penalties of up to 20 years in prison.