Bitcoin-based Liquid Network says $320 million withdrawn in hack

About $320 million worth of Bitcoin was stolen from the federation wallet of the Bitcoin-based Liquid Network in a hack prompting it to stop accepting new transactions, the Reuters reported.

In its Liquid Federation wallet, Liquid Network said “purported white-hat hackers” had taken out about 4,000 of the 4,200 bitcoin. The incident would have an impact on Liquid wallets, the network said, and it apologised to users for the disruption.

“Liquid wallets will be impacted, and we’re sorry for any inconvenience,” the network said in a post on X.

The funds were withdrawn through SideSwap, a settlement platform authorised to process withdrawals from the network, Liquid said. The key used in the process was not compromised, it said.

Liquid Network is a Bitcoin-based payments and settlement network for the transfer and settlement of virtual assets outside of the Bitcoin blockchain.

The network did not immediately provide details on how the withdrawal was executed or who was responsible for it. It described those involved as purported white-hat hackers, a term typically used to describe cybersecurity researchers who find or exploit vulnerabilities to help secure systems.

The incident feeds into concerns over security risks in the cryptocurrency sector where huge amounts of digital currency can be transferred quickly after successful attacks.