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Liquid Network recovers 85% of $320M Bitcoin stolen in exploit
The Liquid Network, a Bitcoin sidechain developed by Blockstream, experienced a major security exploit where approximately 4,000 BTC, valued at roughly $320 million, was withdrawn from its federation wallet. The incident, which affected about 95% of the network's reported reserves, was linked to a software bug in Elements, the open-source technology underpinning Liquid.
Following the withdrawal, the network halted new transactions and deactivated bridge nodes. The actors involved left on-chain messages identifying themselves as ‘whitehats’ and stated they would return the funds once the vulnerability was patched and all nodes were updated.
After Blockstream confirmed that the bridge nodes were patched, the purported white-hat hackers returned 3,400 BTC (approximately $270 million) to the Liquid Federation wallet. However, approximately 598.5 BTC, valued at roughly $47 million, remains outstanding. While the funds were moved through SideSwap’s Peg-out Authorization Key (PAK), both Liquid and SideSwap stated that the key itself was not compromised.
Entities
Adam Back · Bitcoin · Blockstream · Elements · Liquid Network · SideSwap
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 38 SOURCES] The Liquid sidechain has been paused and bridge nodes have been deactivated. bitcoin.fr · www.criptotendencias.com · news.bitcoin.com · dijitaliyidir.com · www.cointrust.com · +30 more
- [● 26 SOURCES] Other assets on the network, such as USDT and DePix, were not affected by the security breach. bitcoin.fr · bitcoinke.io · www.nadanews.com · haber.doviz.com · coinchoice.net · +16 more
- [● 38 SOURCES] The actors behind the transfer left an on-chain message claiming to be 'whitehats'. bitcoin.fr · cryptobriefing.com · dijitaliyidir.com · www.criptotendencias.com · www.cointrust.com · +30 more
- [● 38 SOURCES] Approximately 4,000 BTC, valued at roughly $320 million, were withdrawn from the Liquid Federation wallet. bitcoin.fr · www.criptotendencias.com · cryptobriefing.com · news.bitcoin.com · dijitaliyidir.com · +30 more
- [● 32 SOURCES] Exchanges have suspended L-BTC deposits and withdrawals following the incident. news.bitcoin.com · www.cointrust.com · news.trijo.co · bitcoinke.io · www.cnbce.com · +22 more
- [● 33 SOURCES] The withdrawal was facilitated by a bug in the Elements software used by Liquid. bitcoin.fr · news.bitcoin.com · dijitaliyidir.com · bitcoinke.io · www.cnbce.com · +23 more
- [● 25 SOURCES] Blockstream is attempting to contact the individuals responsible via signed on-chain messages. news.bitcoin.com · dijitaliyidir.com · www.cointrust.com · bitcoinke.io · www.nadanews.com · +15 more
- [● 26 SOURCES] The SideSwap peg-out authorization key (PAK) was not compromised during the incident. bitcoin.fr · dijitaliyidir.com · www.cointrust.com · www.cryptopolitan.com · bitcoinke.io · +18 more
- [● 7 SOURCES] The actor still holds 598.5 BTC worth roughly $47 million. www.blockmedia.co.kr · www.brasilemfolhas.com.br · zombit.info · bitnewsbot.com · cybernoz.com · +1 more