Liquid Network Halted After Alleged Hackers Withdraw $320 Million in Bitcoin
Liquid Network has paused its activity after hackers allegedly withdrew approximately $320 million in bitcoin from its federation wallet. The incident occurred on September 6, when around 4,000 BTC were taken through the SideSwap PAK, or Peg-out Authorization Key. However, Liquid emphasized that no other keys had been compromised.
The network's statement on X read: 'We are aware of a security incident on @Liquid_BTC.' Blockstream, the technology provider, is working with the parties responsible to resolve the issue through an onchain signed message. The statement did not confirm whether the funds would be returned or identify those involved.
Liquid has notified crypto exchanges and suspended deposits and withdrawals for its Bitcoin-backed token, LBTC. The network also disabled bridge nodes temporarily, preventing new transactions from being submitted to the network. This effectively paused the Liquid sidechain until the issue is resolved.