Alleged white-hat hackers withdrew approximately 4,000 bitcoin, worth about $320 million, from Blockstream’s Liquid Network Federation Reserves. The attack reportedly exploited an inflation bug on the LBTC sidechain to create over 4,000 fictitious LBTC, which were then cashed out for on-chain bitcoin through the federation. Bridge nodes were disabled and the sidechain was paused, preventing LBTC users from redeeming their underlying BTC. The hackers left a blockchain message indicating they were white-hats and requesting contact. If the funds are not returned, it would be a heavy blow to the Liquid Network’s user base.
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