Liquid Network Pauses After Purported $320M White-Hat Bitcoin Withdrawal
Liquid Network paused transaction processing after a reported $320 million Bitcoin withdrawal from its multisig reserve addresses. The party behind the withdrawal claimed it was a white-hat action tied to a suspected security flaw, but that claim is not yet verified. The incident affected Liquid, Blockstream’s Bitcoin sidechain, not Bitcoin mainnet: Bitcoin blocks kept being produced normally and BTC transfers on the base layer were unaffected. The pause is serious for Liquid users because the network relies on a federated bridge and different security assumptions than Bitcoin. Operators halted activity while they investigated whether funds were at risk and what triggered the withdrawal. Until an official incident report is released, this should be treated as an active sidechain security event, not a Bitcoin failure.
