Bitcoin redemption freeze puts $136 million Aave market under scrutiny
Threshold Network suspended tBTC minting and redemptions while conducting undisclosed security maintenance, saying the token remains fully backed by 4,320 BTC against 4,185 tBTC in circulation and that no funds were lost. In response, Aave froze new tBTC deposits and borrowing-power increases in its Ethereum Core market, where about 1,760 tBTC worth $136.6 million was supplied. Existing users can repay loans and withdraw eligible collateral, while liquidations continue. Gauntlet also excluded a tBTC-backed Morpho market from its emergency list and withdrew about 65,000 USDC. The pause leaves holders unable to redeem tBTC for Bitcoin, increasing reliance on secondary-market liquidity. Threshold has not disclosed the security issue or given a reopening date.
