Bitcoin hack drains US$320mil from crypto network

A blockchain utilized by multiple cryptocurrency exchanges for Bitcoin transfers was hacked for US$320 million, marking the latest in a series of security breaches that have raised concerns about digital-asset protection. Approximately 4,000 out of the 4,200 Bitcoin stored in a wallet managed by the Liquid Network were stolen. The perpetrators are believed to be "white-hat hackers" who exploit security vulnerabilities and typically return the funds, sometimes in exchange for a fee.

Liquid Network announced that the compromised wallets would be affected and expressed regret for any inconvenience caused. The platform has temporarily halted all new transactions while working on resolving the issue to restore normal network activity. Alex Thorn, a crypto researcher at Galaxy Digital Inc., stated that the hackers had returned 3,400 Bitcoin, keeping around US$47 million for themselves.

This hack comes amid a series of recent attacks that have brought crypto cybersecurity into the spotlight. Just last week, an attacker drained US$6 million from a Crypto.com-linked digital-asset lending platform. In August, the popular offline Bitcoin wallet Coldcard suffered a breach, raising questions about the safest way to store the digital asset. Experts emphasized the need to strengthen critical infrastructure safeguards and implement comprehensive security measures across the entire stack for operators.

Liquid Network, established in 2018 by blockchain technology company Blockstream Corp, is now overseen by a federation of over 80 exchanges, infrastructure companies, and asset managers. The network operates as a sidechain, a separate network used by exchanges for faster settlement due to the main Bitcoin blockchain often experiencing slow and costly transactions due to network congestion. Major exchanges such as BTSE, Bitfinex, and BitMEX, which is shutting down, are among Liquid Network's users.