Liquid Network, a Bitcoin sidechain maintained by Blockstream, has temporarily halted operations after purported white-hat hackers withdrew approximately 4,000 BTC, valued at around $320 million, from the Liquid Federation wallet.
Blockstream reported that the withdrawal was executed via the SideSwap PAK (Peg-out Authorization Key), though the company clarified that neither this key nor any other keys were compromised during the incident.
In response, Liquid has disabled bridge nodes and paused deposits and withdrawals of Liquid Bitcoin (LBTC), while notifying relevant exchanges. Other assets on the network, including USDT, DePix, and tokenized real-world assets, remain unaffected.
The Blockstream team is attempting to communicate with the hackers using an on-chain signed message. Meanwhile, federation members are working to restore network functionality.
Samson Mow, CEO of JAN3, noted that while Liquid functionality within the Aqua Bitcoin wallet is impacted, standard Bitcoin transactions continue to operate normally.
