'Purported White-Hat Hackers' Withdraw $320M in Bitcoin From Liquid
Summary
Blockstream’s Liquid sidechain was paused after about 4,000 BTC left the federation wallet that backs all L-BTC, shrinking the wallet from roughly 4,200 BTC to about 200. SideSwap said a customer sent it 4,000 L-BTC, which it burned under a valid peg-out authorization, and the federation then paid out 3,996 BTC. Liquid says no federation key or SideSwap system was compromised; the issue appears to be a bug in Elements, Liquid’s underlying software, allowing unbacked L-BTC to be created and redeemed normally. The attackers claimed to be white hats, asked Blockstream to patch the bug before returning funds, and have exchanged signed on-chain messages with Blockstream. Other Liquid assets were unaffected, and Bitcoin itself was not impacted.
