Blockstream’s Liquid Network Reports 4,000 BTC Withdrawn in Alleged White-Hat Operation

Blockstream’s Liquid Network announced that roughly 4,000 bitcoin were withdrawn from its federation wallet, reportedly by individuals claiming to act as white-hat hackers. The federation wallet supports Liquid-Bitcoin (L-BTC), a sidechain asset pegged to bitcoin. Following the withdrawal, Liquid Network officials have disabled the bridge nodes connecting the network and have temporarily paused sidechain operations.

Details regarding the nature of the security breach, methods used, and the precise motivations of the individuals involved are still emerging. The Liquid Network team has not yet provided a timeline for the restoration of normal operations or further clarified the state of the withdrawn funds.

Observers note that the incident highlights ongoing security and operational challenges faced by federated blockchain solutions supporting sidechain assets. Stakeholders are awaiting further updates from Blockstream regarding the investigation, remediation efforts, and potential impacts on users and the broader ecosystem.