Liquid Sidechain Halted After $320M Bitcoin Heist

The Liquid sidechain has been paused after approximately $320 million in Bitcoin was withdrawn from its federation wallet. Around 4,000 BTC, roughly 5% of what it held before, left the wallet on Sunday.

Liquid stated that the withdrawal used SideSwap's peg-out key, which wasn't compromised. Instead, they attributed the issue to a bug in Elements, the software Liquid runs on.

A 'purported white-hat hacker' group claimed responsibility and has been communicating with Blockstream through PGP-signed messages inside Bitcoin transactions. They initially offered to send most of the coins back but attached a condition: patch the bug first.

Charles Guillemet, Ledger's chief technology officer, expressed skepticism about the hackers' intentions, likening them to previous hacks and questioning their motives.