Liquid Network suffers a security breach with 4,000 BTC feared lost
Liquid Network acknowledged a security breach on Sunday (September 6) after nearly 4,000 BTC, valued at approximately $320 million, were taken from the Bitcoin wallet of Liquid Federation.
A peg-out, the federation says, it did not authorize the normal way
The party behind the transfer left an on-chain message. An OP_RETURN reading “we are whitehats. contact us on chain” appears in Bitcoin transaction “c103de…e69a19.”
In its post on X, Liquid said “purported white-hat hackers” had withdrawn the coins and that Blockstream was trying to contact them on-chain with a signed message.
ErgoBTC identified the large Bitcoin payout as transaction ” 8db751…a7b140.” It sent roughly 3,996 BTC to “bc1qgs…c6wt7p” and was confirmed in Bitcoin block 965,783 at 14:28:56 UTC on September 6.
On the side of Liquid, Blockstream’s explorer shows the associated transaction, “ce4cae…e988f2,” involving a 3,996.01834922-LBTC peg-out.
Liquid claims that the withdrawal employed SideSwap’s peg-out authorization key (PAK), even though the SideSwap PAK was not breached. This difference is crucial in getting some clarity on what happened.
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