Bitcoin network says $405 million stolen in latest crypto hack
The hack is the latest of recent attacks that have put crypto cybersecurity in the spotlight.
A Bitcoin-linked blockchain used by multiple cryptocurrency exchanges, the Liquid Network, has been breached, resulting in the theft of roughly US$320 million (S$405 million). The incident involves around 4,000 out of the 4,200 Bitcoin housed in the Liquid Federation wallet. Liquid Network, which aims to facilitate quicker transactions, announced the theft through a post on X, expressing regret for any inconvenience caused.
It further mentioned that the perpetrators are believed to be "purported white-hat hackers" who exploit vulnerabilities in the system with the aim of returning the funds. The network has temporarily halted all new transactions, awaiting the resolution of the issue by its federation members. This latest hack is part of a series of recent attacks that have drawn attention to the security issues in the crypto space.
Just last week, a hacker managed to siphon US$6 million from a Crypto.com-linked lending platform. In August, Coldcard, a popular offline Bitcoin wallet, also fell victim to a hack, raising questions about the security of digital asset storage. Launched in 2018 by Blockstream, a blockchain technology company founded by Adam Back, Liquid Network is currently managed by a federation comprising over 80 exchanges, infrastructure firms, and asset managers.
The network provides a solution for faster transactions on the Bitcoin blockchain, which often suffers from delays and high costs due to network congestion. Liquid Bitcoin, or L-BTC, is generated against actual Bitcoin, which is locked up in the process. Notable exchanges such as BTSE, Bitfinex, BitMEX, and Tether's parent company, also utilize the Liquid Network.
Cybersecurity expert Aneirin Flynn suggested that a bug allowing the minting of L-BTC could be the root cause of the breach. Flynn emphasized that the incident underscores the critical weaknesses in the validation and security model of Liquid Network, with nearly 95 percent of the reserves drained and the network currently paused.
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