Liquid Network Hit with $320M Bitcoin Heist

A significant security incident has affected Liquid Network, a Bitcoin layer-2 solution used by cryptocurrency exchanges for accelerated transaction settlement. Approximately 4,000 BTC valued at $320 million was extracted from the platform's federation wallet by individuals claiming to be ethical hackers.

The vulnerability originated from a code flaw in Elements, the open-source framework underlying Liquid Network, rather than from compromised cryptographic keys. The extraction occurred via SideSwap, an authorized trading interface, which complicated early detection efforts.

According to Blockstream, the individuals responsible are engaging with them through blockchain-based Bitcoin messages and have pledged to restore the assets following vulnerability remediation. Additional digital assets on the platform, including USDT, remained unaffected by the incident.