Liquid Network resumes block production after $320M exploit
Liquid Network has restarted block production after a $320 million Bitcoin withdrawal, but transactions and peg operations are still suspended. The network is running in a monitored “block production only” mode while functionary and bridge node updates are deployed and stabilization is verified. Peg-outs, including PAK-authorized ones, remain paused until the BTC/L-BTC reserve is restored. The incident began when actors claiming to be white-hat hackers withdrew about 4,000 BTC from Liquid’s federation wallet, nearly 95% of its balance. The drain was tied to a bug in Elements, the open-source software behind Liquid. In response, Liquid released Elements v23.3.4 to harden range-proof cache keys and address the proof-verification cache vulnerability. After Blockstream confirmed patched bridge nodes, about 3,400 BTC was returned, leaving roughly 598 BTC still outstanding.
