Liquid Network Halted After 'White Hats' Steal $320M in BTC
The Liquid Network has been halted due to a vulnerability in its open-source codebase. On September 6, 'white-hat' hackers withdrew approximately 4,000 BTC worth $320 million from the federation wallet. This represents about 95% of the wallet's total balance.
The actors claimed they would return the funds after a patch is deployed to fix the vulnerability in Elements, which underpins Liquid. Blockstream, the technology provider for Liquid, has been negotiating with the actors through signed messages embedded directly in Bitcoin transactions.
SideSwap said the withdrawal arrived as a standard customer order using its Peg-out Authorization Key, and that the root cause was a bug in Elements, not a flaw in SideSwap's infrastructure. Exchanges connected to Liquid had paused or suspended L-BTC deposits and withdrawals at the time of reporting.