Liquid Network Hit by $320 Million Hack, Raising Crypto Security Concerns
A major security breach has struck Liquid Network, resulting in the withdrawal of approximately $320 million worth of Bitcoin from its federation wallet. The incident occurred when around 4,000 of the 4,200 Bitcoin held in the Liquid Federation wallet were withdrawn, representing roughly 95% of the wallet's holdings.
Liquid Network has described those responsible as 'purported white-hat hackers', a term used to describe hackers who identify security vulnerabilities and may later return the funds. The network has halted new transactions while federation members investigate the breach and work to restore normal operations.
A key question surrounding the incident is how the funds were able to leave the federation wallet, as the key used to facilitate the transactions had not been compromised. Cybersecurity experts are now examining whether the problem may have involved the mechanism used to issue Liquid Bitcoin, known as L-BTC.