How 4,000 BTC walked out of Blockstream’s Liquid Network
Roughly 4,000 BTC, worth about $320 million left Blockstream’s Liquid Federation wallet after it was hacked on Sunday afternoon.
Eleven of the federation’s 15 keys signed the transaction, even though the Liquid Network tokens that redeemed the BTC should never have existed.
The attacker’s address, which still held 3,998 BTC by Monday morning, published an OP_RETURN message reading, “we are whitehats. contact us on chain.”
An hour later, a second address answered, “Please contact security@blockstream.com.” A follow-up message from the hacker allegedly offered a Signal handle for further communication.
SideSwap, whose peg-out service processed the order, blamed the incident on faulty Liquid Bitcoin (LBTC) originating from a third-party “Elements bug,” denying responsibility of “any SideSwap system.”
Liquid Network confirmed the incident shortly after 4:25pm New York time, saying, “Effectively, the Liquid sidechain is paused until this issue is resolved,” with bridge nodes disabled and exchanges suspending LBTC deposits and withdrawals.
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