DATABASES Signal 490
Liquid Federation wallet loses ~4,000 BTC (~$320M) in purported white-hat hack
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Around 4,000 BTC (~$320 million) were transferred from the Liquid Federation wallet using the SideSwap peg-out authorization key, leading exchanges to suspend LBTC deposits and withdrawals and bridge nodes to be taken offline.
The pause of bridge nodes halts all new transactions on the Liquid sidechain, affecting users who rely on LBTC for transfers and trading. Exchanges have already halted LBTC deposits and withdrawals, which could disrupt liquidity and trading pairs that depend on the asset. Federation members are working to resolve the incident, but until then the network remains inactive, highlighting reliance on multi-sig governance for sidechain security.
Written by elseif from the cluster below · every claim links back to a sourceThe three things worth knowing
The withdrawal moved approximately 4,000 BTC (~$320 million) from the Liquid Federation wallet via the SideSwap peg-out key.
Bridge nodes were disabled, preventing any new transactions and effectively pausing the Liquid sidechain.
Exchanges responded by suspending LBTC deposits and withdrawals, while other Liquid assets such as USDT, DePix, and RWAs remain unaffected.
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What the cluster adds up to.
The Liquid Federation wallet experienced an unauthorized transfer of about 4,000 BTC (~$320 million) using the SideSwap peg-out authorization key. The Liquid Network team confirmed the incident and noted that the key itself was not compromised. Blockstream stated they are contacting the actors on-chain with a signed message. Following the move, exchanges were notified and have begun to pause LBTC deposits and withdrawals.
Bridge nodes on the Liquid network were temporarily disabled, which stops any new transactions from being submitted to the sidechain. As a result, the Liquid sidechain is effectively paused until the issue is resolved. Liquid wallets are impacted, and users cannot send or receive LBTC during this period. Federation members are actively working to restore normal network activity.
Other assets on Liquid, such as USDT, DePix, and various real-world asset tokens, were reported to be unaffected by the incident. Users can monitor the situation via the mempool.space address provided by the Liquid team. The pause highlights the dependence on multi-sig federation governance for sidechain security and operational continuity. Until the federation resolves the matter, normal Liquid operations remain halted.
Written by elseif from the cluster below · checked for specifics the sources never containedTHE CLUSTER