Bitcoin
Liquid Sidechain Recovers $270 Million in Bitcoin Following Exploit
Self-described white-hat hackers have returned 3,400 Bitcoin to the Liquid Federation wallet as operators prepare to restart the paused network.
Purported white-hat hackers have returned 3,400 Bitcoin, valued at approximately $270 million, to the Liquid Federation wallet after roughly 4,000 BTC was removed from the sidechain's 4,200 BTC reserve. The transfer restores approximately 85% of the taken funds, leaving 598 BTC outstanding.
The withdrawal was executed through SideSwap's Peg-out Authorization Key, though Liquid and SideSwap confirmed the key itself was not compromised, attributing the exploit to a software bug in the Elements codebase. Blockstream communicated with the actors through signed onchain messages, leading to the return of the funds once software patches were distributed.
JAN3 CEO Samson Mow confirmed that Liquid remains paused while federation members apply security updates and resolve a chain split ahead of a network restart. Users were instructed to avoid sending funds to Liquid peg-in addresses until operations resume, while Ledger CTO Charles Guillemet questioned the white-hat label following the partial return.
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