Liquid Network Suffers $320 Million Hack: Attacker Demands Return
The Liquid Network, a sidechain built by Blockstream for Bitcoin, suffered a massive hack on September 6th. A total of $320 million in BTC was stolen from the federation wallet that backs the network.
The incident occurred when an attacker exploited a software bug in Elements, the open-source codebase Liquid runs on. The bug allowed the creation of counterfeit L-BTC, which were then redeemed through SideSwap's peg-out service.
What is unusual about this hack is that the attacker has come forward and is asking to return most of the funds once the bug is patched and every node has updated.
However, experts are skeptical about the hacker's intentions. Ledger CTO Charles Guillemet pointed out that genuine white hats disclose a flaw before moving hundreds of millions in collateral, not after. The incident highlights the risk of protocol-level bugs in shared reserves and the importance of proper auditing.