Liquid Network Resumes Block Production After $320M Exploit

The Liquid Network has resumed block production after a massive exploit that saw around $320 million in Bitcoin withdrawn from its federation wallet.

On September 6, actors claiming to be white-hat hackers withdrew approximately 4,000 BTC (around 95% of the wallet's balance) using L-BTC originating from a bug in Elements, the open-source software underpinning Liquid. The withdrawal was linked to a proof-verification cache vulnerability.

The affected bridge nodes had been patched by Blockstream, and after the return of 3,400 BTC (worth around $270 million at the time) by the actors involved, block production resumed on September 7 without transactions as a precautionary measure. Required updates to functionary and bridge nodes have also been deployed.

Peg operations, including PAK-authorized peg-outs, remain suspended while the network works to restore its BTC/L-BTC reserve.