The Bitcoin layer 2 network Liquid suffered a security incident in which individuals claiming to be white-hat hackers withdrew approximately 4,000 BTC, worth $320 million, from the Liquid Federation wallet. The attack exploited the SideSwap PAK (Peg-out Authorization Key), though the key itself reportedly was not compromised. Crypto exchanges have suspended or are preparing to suspend LBTC deposits and withdrawals, while the network temporarily disabled its bridge nodes, effectively pausing the sidechain. Blockstream is attempting to contact the parties through signed on-chain messages, but Ledger CTO Charles Guillemet remains skeptical of the white-hat claim. As of now, approximately 3,998.5 BTC remain unmoved, with the actors stating they will return the funds once the bug is fixed.
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