Liquid Network, a Bitcoin sidechain, exploited for $320M in BTC; network fully paused and transactions halted.
Security & Exploits ·
Blockstream's Liquid Network, a Bitcoin sidechain used by multiple exchanges, experienced a major breach in which roughly 4,000 BTC—valued at approximately $320 million—was withdrawn by attackers. The network has been fully paused in response, halting all transaction activity. The attackers have claimed to operate as white hats, and have reportedly engaged Blockstream through PGP-signed messages embedded in transactions.
The exploit compromises a settlement layer sitting adjacent to Bitcoin itself, but the damage remains confined to the sidechain rather than affecting Bitcoin's core network or spot holdings. This distinction limits direct systemic risk to the broader Bitcoin ecosystem, though the breach still represents material losses for users and platforms relying on Liquid's infrastructure.
The incident adds to a pattern of recent major hacks in cryptocurrency, which may influence market confidence in Bitcoin-adjacent systems and sidechain security models. Key unknowns remain about the exploit's origin, whether the attackers' white-hat claims will be validated through negotiation with Blockstream, and how soon the network may resume normal operations.