$320M in BTC withdrawn from Liquid Network amid concerns
6.6 Security Nearly 4,000 BTC worth $320M were withdrawn from Liquid Network in a single transaction, sparking security concerns and a network pause after a 'whitehat' claim.
Nearly 4,000 BTC, valued at approximately $320 million, were withdrawn from Blockstream’s Liquid Network in a single peg-out transaction on September 6. The transaction included an on-chain message from the actors, claiming to be “whitehats” and inviting contact. However, the legitimacy of this claim has been questioned by several industry figures. This withdrawal represented about 95% of Liquid’s Bitcoin reserves and was executed using SideSwap’s Peg-out Authorization Key. Liquid clarified that no keys were compromised. In response, Liquid paused network activity and notified exchanges, leading some to suspend LBTC deposits and withdrawals. Most of the withdrawn BTC remains unmoved, and the root cause of the vulnerability has not yet been disclosed. The incident has raised significant concerns about the security and management of Liquid’s reserves, with stakeholders awaiting further updates.
