Liquid Network Security Incident: Nearly $320M In $BTC Withdrawn
Around 4,000 BTC, worth nearly $320 million, was withdrawn from the Liquid Network Federation wallet after an apparent vulnerability in Elements software allowed unbacked L-BTC to be created.
🔹 The SideSwap Peg-out Authorization Key (PAK) was reportedly not compromised.
🔹 Liquid has paused the sidechain and L-BTC deposits/withdrawals.
🔹 Other Liquid assets, including USDT, DePix and RWAs, were reported unaffected.
🔹 The wallets holding the BTC claim to be “white hats” and have offered to return most funds after the vulnerability is fully patched.
🔹 Blockstream has since said the bridge nodes are patched and safe for the funds to be returned.
This was not a Bitcoin network hack. The incident appears linked to Liquid/Elements validation and L-BTC backing.
The ~4,000 BTC had not yet been returned at the latest update.
September 7, 2026 4.9K 4
