Liquid Network Hit by $320 Million Hack: White-Hat Claim Raises Red Flags

Liquid Network, a Bitcoin Layer 2 network, has been hit by a security incident in which hackers withdrew approximately 4,000 BTC (worth $320 million) from the Liquid Federation wallet. The hackers claim to be white-hats and have stated that they will return the funds after a bug is fixed on the network.

The issue was reported on September 6, with Blockstream attempting to contact the parties involved through a signed on-chain message. However, the hacker appears to prefer communicating publicly rather than via email or private messaging. The exchange began at 11:30 AM PDT, when the hacker wrote, 'we are whitehats. contact us on chain.'

Liquid said that other assets on the network, including USDT and real-world assets, were not affected. However, the network has temporarily disabled its bridge nodes, meaning new transactions cannot be submitted, effectively pausing the sidechain while the issue is being addressed.

Charles Guillemet, CTO of Ledger, was skeptical of the white-hat claim and pointed out that legitimate security researchers would not typically drain a bridge and then ask to be contacted on-chain. He drew parallels with previous hacks such as the Ronin hack and the Euler exploit, where attackers stole funds after compromising validator keys or exploiting vulnerabilities.