Nearly $320 Million in Bitcoin Withdrawn From Liquid Network in Mysterious 'White-Hat' Incident

Purported white-hat hackers have withdrawn nearly 4,000 Bitcoin, worth more than $300 million, from the shared wallet backing the Liquid Network, a Bitcoin sidechain used for faster transfers. According to Blockstream, the withdrawal occurred through the SideSwap Peg-out Authorization Key, though the company states that key and others were not actually compromised, leaving the exact cause of the incident unclear.

Other assets on the network, including USDT, DePix, and real-world asset tokens, were unaffected. Exchanges have been notified and have paused LBTC deposits and withdrawals, while bridge nodes were temporarily disabled, effectively halting the Liquid sidechain until the situation is resolved. Blockstream says it is attempting to contact the actors on-chain using a signed message.

The wider Bitcoin network continues to operate normally, and the incident appears limited to Liquid wallets. Blockstream has stated the federation is working to restore normal operations, though full details of how the funds were withdrawn have not yet been disclosed.