White Hats Withdraw $320M from Liquid Sidechain
A significant security incident occurred on September 6, 2026, affecting Liquid, a Bitcoin sidechain. Approximately 4,000 BTC worth $320 million were withdrawn from its federation wallet, which made up nearly 95% of its total balance. The actors behind the withdrawal claimed to be white hats and contacted Blockstream through signed on-chain messages.
They stated that they would return most of the funds once a vulnerability in the Elements software was patched and all nodes updated. As of this report, the funds had not been returned. Liquid's bridge nodes were disabled, halting new transactions, while exchanges halted or prepared to halt L-BTC deposits and withdrawals.
SideSwap, a platform offering peg-out services on Liquid, confirmed that the withdrawal passed through its system as a customer order using a Peg-out Authorization Key (PAK). However, they stated that their systems were not compromised.