Bitcoin sidechain Liquid pauses after purported ‘white hats’ withdraw $320M in BTC
The actors told Blockstream they would return most of the 4,000 BTC after the Elements vulnerability is patched across the network.
Bitcoin sidechain Liquid temporarily halted operations after purported "white hat" hackers withdrew approximately 4,000 Bitcoin, valued at $320 million, from its federation wallet. The hackers informed Blockstream, the technology provider for Liquid, that they would return most of the 4,000 BTC once the Elements vulnerability plaguing the network is patched across all nodes.
The withdrawal passed through Liquid's Peg-out Authorization Key (PAK) service, and the funds originated from a bug in the open-source software Elements. As of the latest update, the returned Bitcoin still represents roughly 95% of the wallet's initial 4,200 BTC balance. Other assets on the Liquid network, such as USDT, DePix, and real-world assets, remained unaffected.
Liquid's federation members are working to resolve the vulnerability while the sidechain remains paused. Further details will be provided as they become available.
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