Liquid Network Loses $320 Million in Bitcoin Hack

A security incident has hit the Liquid Network, allowing hackers to withdraw approximately $320 million in Bitcoin. The attackers claim they are 'purported white-hat hackers' and have communicated with Blockstream through messages recorded on the Bitcoin blockchain.

The breach occurred when a customer sent 4,000 L-BTC to SideSwap's peg-out service, which then paid out 3,996 BTC to the customer's Bitcoin address. The tokens involved were created through a bug in Elements, the software underpinning Liquid, rather than being backed by Bitcoin.

The attackers have said they will return most of the stolen funds once the underlying vulnerability is fixed. Blockstream has patched its bridge nodes and sent a signed message saying the funds can safely be returned.