Bitcoin sidechain Liquid pauses after purported ‘white hats’ withdraw $320M in BTC

Latest NewsPublishedSep 7, 2026The actors told Blockstream they would return most of the 4,000 BTC after the Elements vulnerability is patched across the network.Bitcoin sidechain Liquid paused operations after actors claiming to be white-hat hackers withdrew about 4,000 Bitcoin worth $320 million from its federation wallet. On Sunday, Liquid said that bridge nodes were disabled, preventing new transactions, while exchanges had halted or were preparing to halt L-BTC deposits and withdrawals.Blockstream, Liquid’s technology provider, started contacting the actors through signed onchain messages. Subsequent messages show the actors told Blockstream to patch the vulnerability and ensure every node was updated before they would return most of the Bitcoin. They also sent encrypted technical details to Blockstream, according to Galaxy Digital research head Alex Thorn. At the time of writing, the funds had not been returned. SideSwap said the withdrawal passed through its peg-out service as a customer order using its Peg-out Authorization Key (PAK), but that the key was not compromised. It said the L-BTC used in the transaction originated from a bug in Elements, the open-source software u...