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Hackers Drain $320 Million From Liquid Network, Then Return Most of It

Hackers exploited an Elements bug to drain about 4,000 BTC (~$320M) from Liquid Network's federation wallet, then returned 3,400 BTC after Blockstream patched.

An attacker drained roughly 4,000 of 4,200 BTC (~$320M) from Bitcoin's Liquid Network federation wallet on September 6 by exploiting a bug in Elements, the open-source code powering the sidechain, which allowed unbacked L-BTC tokens that were redeemed for real Bitcoin through SideSwap's authorized peg-out mechanism. The self-described white-hat attackers negotiated publicly via OP_RETURN on-chain messages, demanding the bridge nodes be patched before returning 3,400 BTC (~$262.6M) and keeping about 598 BTC (~$47M). Blockstream confirmed the affected bridge nodes were patched; the network remains paused while federation members complete security work, and experts debate whether the act legally constitutes extortion.

Security Affairs · 7d agoExploit / PoC in the wild

Hackers Return $263 Million Stolen From Liquid Network

Hackers drain roughly 4,000 BTC (~$320M) from Liquid Network federation wallet, then return 3,400 BTC with ~598 BTC still outstanding.

Attackers withdrew about 4,000 Bitcoin (roughly $320 million) from the Liquid Network federation wallet, which held approximately 4,200 BTC, via the SideSwap Peg-out Authorization Key without that key being compromised. Blockstream disabled nodes and suspended transactions after disclosing the heist on Sunday. Alleged white-hat hackers returned 3,400 BTC (~$262.6M) on Monday, demanding the underlying bug be patched before releasing the remaining ~598 BTC (~$47M). The network remains paused while fixes and a safe restart are prepared.

SecurityWeek · 7d agoData breach in the wild

A hacker stole $340M in a crypto heist, then returned most of it

A hacker exploited a bug to steal about 4,000 BTC (~$340M) from Blockstream's Liquid Network, then returned roughly 3,400 BTC after the bug was fixed.

A hacker exploited a bug to withdraw roughly 4,000 bitcoins worth about $340 million from Liquid Network, a settlement service launched in 2018 by crypto firm Blockstream and used by several cryptocurrency exchanges. Liquid Network paused operations, and the hacker, described as a white hat, offered to return the funds once the bug was fixed. Former Blockstream executive Samson Mow said the bug was fixed and about 3,400 BTC (~$293M) returned, leaving roughly 600 BTC (~$47M) under the hacker's control pending further security improvements. Rekt's leaderboard ranks the heist among the largest cryptocurrency thefts to date.

TechCrunch · Security · 7d agoExploit / PoC in the wild

Hackers drain $320M in Bitcoin from Liquid Network, claim they’re the good guys

Hackers withdrew roughly 4,000 BTC (about $320M) from the Liquid Network federation wallet backing the Blockstream-developed Bitcoin sidechain, claiming benign intent.

Blockstream said Sunday that around 4,000 BTC, roughly $320 million, was withdrawn from the federation wallet backing Liquid Network, a Bitcoin sidechain used by exchanges and financial institutions. The attackers publicly claimed they were 'the good guys'; no attribution or recovery details are provided. The theft affects infrastructure that backs custodial Bitcoin transfers for exchanges.

DataBreaches.net · 8d agoData breach in the wild

Hackers drain $320M in Bitcoin from Liquid Network, claim they're the good guys

Attackers withdrew about 4,000 BTC (~$320M) from Liquid Network's federation wallet via a SideSwap peg-out, claiming whitehat status.

Hackers drained roughly $320 million in Bitcoin — about 4,000 BTC, 95% of holdings — from the federation wallet backing Blockstream's Liquid Network sidechain. The withdrawal occurred through SideSwap using its Peg-out Authorization Key (PAK), yet no PAK appears to have been compromised, and the exact mechanism remains under investigation. The actors embedded an on-chain message identifying themselves as whitehats, asked Blockstream to patch federation nodes first, and promised to return most of the funds after fixes are confirmed. Liquid disabled its bridge nodes and asked exchanges to suspend L-BTC deposits and withdrawals; other Liquid assets and the Bitcoin network were unaffected.

The Register · Security · 8d agoExploit / PoC in the wild

Appears with

product Liquid Network 5victim Liquid Network 5vendor Blockstream 5organization Liquid Network 2product L-BTC 2vendor Liquid Network 2vendor SideSwap 2product SideSwap 1vendor Bitrue 1product Bitcoin 1vendor Galoy 1victim Blockstream 1organization SideSwap 1product LBTC 1product Elements 1
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