Liquid Network's $320M Bitcoin Heist Sparks White-Hat Debate

Blockstream's Liquid Network has been hit by a significant security incident, with purported white-hat hackers withdrawing around $320 million in Bitcoin from its federation wallet on September 6. The hackers, who claim to be 'whitehats', left an on-chain message asking Blockstream to contact them directly.

According to Ledger's chief technology officer Charles Guillemet, the withdrawal of such a large amount before making contact is 'completely different from disclosing a vulnerability'. He questioned the label of 'white-hat' hackers in this case.

The federation wallet held around 4,200 BTC before the incident, with roughly 200 remaining afterward. The wallet is used to back Liquid's main token one-to-one, releasing coins only as matching L-BTC is destroyed. Blockstream has disabled the network's bridge nodes and asked exchanges to pause L-BTC deposits and withdrawals.

The sidechain itself continued to produce blocks despite the incident, but other assets issued on Liquid were unaffected.