Liquid Network Pauses After $320 Million Bitcoin Exploit From Software Bug

TLDR

• Purported white-hat hackers withdrew around 4,000 BTC worth $320 million from Liquid Network’s federation wallet
• The exploit came from a software bug in Elements, the open-source software that powers Liquid, not a compromised key
• Funds moved out through SideSwap, a legitimate trading platform, making detection harder
• The hackers are communicating with Blockstream via on-chain Bitcoin messages and say they will return funds once the bug is patched
• Other assets on the network including USDT were not affected

Liquid Network, a Bitcoin sidechain used by exchanges to settle transactions faster, has paused all operations after losing roughly $320 million in Bitcoin to what appear to be white-hat hackers.

We are aware of a security incident on @Liquid_BTC. Purported white-hat hackers have withdrawn ~4,000 BTC (~$320 million) from the Liquid Federation wallet. The @Blockstream team is working on contacting them on-chain with a signed message.

What we know so far is that the funds…

- Liquid Network 🌊 (@Liquid_BTC) September 6, 2026

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