Liquid Network said Sunday that purported white-hat hackers withdrew approximately 4,000 bitcoin, worth about $320 million, from its federation wallet, prompting the Bitcoin sidechain to pause network activity.
In a Sept. 6 post on X, Liquid said Blockstream, the network's technology provider, was working to contact the parties responsible through an onchain signed message. The statement did not identify them or confirm whether the funds would be returned.
The withdrawal represented roughly 95% of Liquid's reported bitcoin reserves, which stood at approximately 4,200 BTC before the incident.
"We are aware of a security incident on @Liquid_BTC," the network wrote.
According to Liquid, the funds were withdrawn through the SideSwap PAK, or Peg-out Authorization Key. The network said that key had not been compromised, nor had any others. Liquid did not explain the root vulnerability that allowed the withdrawal.
