Industry News

$320 Million Vanishes From Bitcoin's Liquid Network in 23 Minutes

CryptoTicker · 7 Sept 2026

Key Takeaway Businesses relying on cross-chain bridges or sidechains should treat these systems as high-risk infrastructure and follow custodian security advisories closely, especially when large transfers or unusual on-chain messages appear.

On 6 September 2026, around 4,000 BTC (about $320 million) left the federation wallet backing Liquid Network, a Bitcoin sidechain operated by Blockstream since 2018. The wallet went from holding roughly 4,200 BTC to just over 200 in the space of 23 minutes, wiping out about 95% of all Bitcoin ever pegged into the network.

The transaction was processed through SideSwap, a legitimate Liquid Federation member that handles peg-out requests converting Liquid Bitcoin back into mainchain Bitcoin. The order appeared valid: the Liquid-side coins were burned and a proper peg-out authorisation accompanied the payout, meaning nothing about the process itself was flagged as suspicious at the time.

Shortly after the funds moved, the recipient address sent a small follow-up transaction with an embedded message identifying the sender as a white hat and requesting contact. Blockstream responded on-chain and the two sides have since been negotiating the return of funds through signed messages. In response, Liquid disabled its bridge nodes and paused the network, and several exchanges have suspended deposits and withdrawals of Liquid Bitcoin while the situation is investigated.

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