Liquid Network Hacked for Nearly $320 Million in Bitcoin
Blockstream's Liquid Network has been halted after an alleged white-hat hacking group made off with nearly $320 million in Bitcoin. The attackers claimed to be white hats, but Ledger CTO Charles Guillemet and others dispute this claim.
The hackers withdrew the funds using a Peg-out Authorization Key (PAK) from SideSwap, but Blockstream says the key was not compromised. An on-chain message left by the hackers claims they will return the money once a software fix is implemented to prevent future breaches.
Before the incident, the federation wallet held around 4,200 BTC, but now it's down to just over 200 BTC, or about 5% of its original reserve. The price of Bitcoin remains relatively stable near $80,000, but the major effect is likely on L-BTC liquidity and tokens that depend on Liquid Network's settlement layer.
Some observers argue that the hackers' actions do not align with those of white hats, who typically disclose vulnerabilities before exploiting them. Until a public agreement is reached between Blockstream and the hackers, the security of the L-BTC peg remains uncertain.