Hackers drain $320M in Bitcoin from Liquid Network, claim they're the good guys
Self-described white hats promise to return 'most' of the 4,000 BTC once the vulnerability is fixed
Hackers have reportedly removed approximately $320 million worth of Bitcoin from the Liquid Network, asserting they are the "good guys". Liquid, a Bitcoin sidechain managed by Blockstream, disclosed on X that around 4,000 BTC were taken from its federation wallet. This represents roughly 95 percent of the wallet's 4,200 BTC balance.
The hackers have identified themselves as "whitehats" and have offered to return most of the Bitcoin once the vulnerability is resolved and the federation's nodes are updated. They also stated that the BTC was withdrawn via SideSwap using the federation's Peg-out Authorization Key (PAK), but neither SideSwap's PAK nor any other appeared to be compromised.
The exact method of the withdrawal remains under investigation. The incident highlights that adding Bitcoin to a system does not provide it with Bitcoin’s security model. Liquid operates as a federated sidechain, with members collectively managing the Bitcoin backing L-BTC, as opposed to relying on Bitcoin's miners for security.
Written by urgent.news from The Register's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
