Market Incident
Public · Developing
Liquid Network confirmed a security incident, saying the funds were withdrawn via SideSwap's Peg-out Authorization Key (PAK), while the key itself and other keys were not compromised. Exchanges have been notified and have paused or will pause LBTC deposits and withdrawals. Other
Liquid Network confirmed a security incident where funds were withdrawn using SideSwap's Peg-out Authorization Key (PAK). The key itself and other keys were not compromised. Exchanges were notified and have paused or will pause LBTC deposits and withdrawals.
Published:
Updated:
What happened
Someone claiming to be a security researcher removed nearly 4,000 Bitcoin from a Bitcoin sidechain called Liquid Network. The sidechain was stopped, and users can't take out their Bitcoin. The person removed the funds using a special key from a service called SideSwap, but Liquid says no key was stolen.
Global impact / market context
Ordinary investors who use Liquid Network to move Bitcoin can't get their Bitcoin out because withdrawals are frozen. Exchanges have paused accepting or sending this sidechain's coins. The person says they will return the Bitcoin once a flaw in the network is fixed, but it's not clear if or when that will happen, creating uncertainty for anyone holding these coins.
What to watch
- Check if Liquid Network resumes normal service and allows users to take out their Bitcoin, because that's the main sign the situation is being resolved.
- Check if the claimed safe-return of the funds actually happens on the blockchain, because that will confirm if the person is acting in good faith.
- Check if exchanges restart deposits and withdrawals of the sidechain's coins, because that will show if the wider market trusts the network again.
Evidence
- AMBCrypto — Liquid Network restarts after $320M hack, but peg-outs remain frozen — What's happening?
- Crypto Valley Journal — Liquid Network hack: Bitcoin layer 2 loses USD 320 million
- X - solidintel_x — INTEL: Bitcoin sidechain Liquid Network was hacked for nearly 4,000 bitcoin:native worth $320M, with the attacker now communicating onchain and saying the funds will be returned once the vulnerability is fixed
- Coindoo.com — Liquid Says No Keys Were Stolen – How Did 4,000 BTC Leave?
- X - lookonchain — An attacker claiming to be a white-hat hacker drained 3,998.5 $BTC ($319.5M) from Liquid Network.
- X - cointelegraph — ALERT: Liquid Network says ~4,000 BTC ($320M) was withdrawn from its Federation wallet by purported white-hat hackers. The Liquid sidechain is paused until the issue is resolved.
- X - Bitcoin Magazine — JUST IN: Hackers have stolen ~4,000 Bitcoin worth $320 million from the Liquid Network The hackers claim to be white hat hackers, and said to "contact us on chain"
- X - wublockchain — Liquid Network confirmed a security incident, saying the funds were withdrawn via SideSwap's Peg-out Authorization Key (PAK), while the key itself and other keys were not compromised. Exchanges have been notified and have paused or will pause LBTC deposits and withdrawals. Other
- Incident timeline — Liquid Network restarts after $320M hack, but peg-outs remain frozen — What's happening?
- Incident timeline — Liquid Network hack: Bitcoin layer 2 loses USD 320 million
- Incident timeline — INTEL: Bitcoin sidechain Liquid Network was hacked for nearly 4,000 bitcoin:native worth $320M, with the attacker now communicating onchain and saying the funds will be returned once the vulnerability is fixed
- Incident timeline — Liquid Says No Keys Were Stolen – How Did 4,000 BTC Leave?
- Incident timeline — An attacker claiming to be a white-hat hacker drained 3,998.5 $BTC ($319.5M) from Liquid Network.
- Incident timeline — ALERT: Liquid Network says ~4,000 BTC ($320M) was withdrawn from its Federation wallet by purported white-hat hackers. The Liquid sidechain is paused until the issue is resolved.
- Incident timeline — JUST IN: Hackers have stolen ~4,000 Bitcoin worth $320 million from the Liquid Network The hackers claim to be white hat hackers, and said to "contact us on chain"
- Incident timeline — Liquid Network confirmed a security incident, saying the funds were withdrawn via SideSwap's Peg-out Authorization Key (PAK), while the key itself and other keys were not compromised. Exchanges have been notified and have paused or will pause LBTC deposits and withdrawals. Other