Industry News

$320 Million Drained from Bitcoin's Liquid Network in Major Exploit

Benzinga · 7 Sept 2026

Key Takeaway Businesses holding or transacting in cryptocurrency should treat any bridge, wallet, or exchange as a potential point of failure and avoid keeping large balances on platforms without independently verified security track records.

Liquid Network, a Layer 2 solution for Bitcoin, has paused all bridge activity and new transactions after attackers withdrew nearly 4,000 BTC, worth around $320 million, representing about 95% of the platform's reported Bitcoin reserves. The platform disabled bridge nodes so no new transactions could be submitted, effectively freezing the sidechain, and has alerted exchanges to halt deposits of its tokenized asset, Liquid Bitcoin (LBTC).

Unusually, the attackers left an on-chain message stating, "We are whitehats. contact us on chain," suggesting the funds may have been taken by security researchers rather than criminals intent on permanent theft. Liquid Network said federation members are working to resolve the issue and restore normal operations, but has not yet confirmed the identity or intent of those behind the withdrawal.

This incident adds to a string of recent cryptocurrency security failures, including the theft of $88 million in Bitcoin from Coldcard hardware wallets last month and a SafePal data breach affecting roughly 40,000 customers. The pattern highlights ongoing risks in crypto infrastructure, even for platforms marketed as secure bridging or custody solutions.

Summarised by CISO AI from Benzinga. We link back to every original so you can read it yourself.