Bitcoin-based Liquid Network says $320 million withdrawn in hack
- On Sunday, Sept 6, 2026, Liquid Network halted all new transactions after unknown actors withdrew roughly 4,000 BTC, worth about $320 million, from its federation wallet, draining nearly 95% of reserves.
- Investigators identified a node-level software bug in Elements, the open-source code powering the sidechain, that allowed minting of unbacked L-BTC without compromising private keys or hardware modules.
- Self-Described 'white-hat hackers' communicated with Blockstream via on-chain messages, promising to return funds after security patches; Ledger Chief Technology Officer Charles Guillemet questioned this, calling it extortion.
- The actors returned 3,400 BTC on Monday, but retained roughly 598.5 BTC, worth about $47 million, while Liquid Network resumed block production on Thursday without processing transactions.
- This incident highlights growing vulnerabilities in crypto infrastructure, following recent attacks on Coldcard hardware wallet and lending platforms, undermining trust in federation-based Bitcoin custody models.
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Liquid Network Hacked: $320M Bitcoin Drained in 2026 Exploit
An attacker exploited a software bug in Liquid Network to create unbacked L-BTC tokens, draining 4,000 bitcoin ($320 million) from reserves. They returned 3,400 BTC but kept $47 million as a "bounty." Here's how the exploit worked, why Liquid's security model failed, and what it means for Bitcoin's sidechain future.
Liquid Network halts new transactions after 'nice guy' hackers steal nearly all its Bitcoin — but then return most of it after a patch is issued
Liquid Network is still disrupted, but users can breathe a sigh of relief as most of the stolen funds have been returned.
Attackers Drained 4,000 Bitcoin From Blockstream's Liquid Network. They Say They Are White Hats and Want to Give It Back.
A bug in Liquid's code let someone mint Bitcoin-backed tokens out of thin air, drain 95% of the federation wallet, and then claim they did it to help. Whether that story holds up depends on what happens to the coins they kept.
The attack became a large-scale security test of Liquid: about $320 million was controlled by white hackers, but about 85% of the stolen funds had already returned to the system after the program error had been corrected.
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