Liquid Network Rocked by $320M BTC Withdrawal After White-Hat Hacker Takes Credit

A security incident on Liquid Network resulted in a $320 million withdrawal of about 4,000 Bitcoin from the federation wallet. The funds were moved via the SideSwap PAK (Peg-out Authorisation Key), but Liquid confirmed that no authorisation key was compromised.

The network immediately disabled bridge nodes and paused the sidechain to prevent further withdrawals, while exchanges halted LBTC deposits and withdrawals as an investigation continues. Other assets on the network, such as USDT, DePix, and RWAs, remain unaffected.

A white-hat hacker took credit for the withdrawal, leaving a message claiming their intentions were pure. They then engaged in a public conversation with Blockstream through OP_RETURN messages and PGP-encrypted notes, ultimately requesting that Blockstream fix the vulnerability before returning most of the funds.