Liquid Network Peg-Out Leaves 4,000 BTC Missing
The Liquid Network, a well-known Bitcoin sidechain, experienced an unusual incident on September 6, 2026. Approximately 4,000 BTC (worth around $319 million to $320 million at the time) were withdrawn from the federation wallet without any key being stolen or compromised.
An analysis by tftc.io revealed that between 3,998.5 and 4,019.4 BTC were removed, leaving behind only about 207 BTC in the federation wallet. The network halted immediately after the incident, and new deposits and withdrawals between Bitcoin and Liquid are currently blocked.
The issue lies in a bug in Elements, the open-source software Liquid is built on. While reports differ on the exact nature of the problem (inflation bug or regular process), both scenarios lead to the same outcome: the sidechain's accounting and the federation's actual Bitcoin holdings no longer match.
The whitehats who carried out the operation have left a message on-chain, stating that they are willing to return most of the sum once the Elements vulnerability is closed network-wide. However, this undertaking has not been confirmed, and no repayment has been made yet.