Blockstream Pauses Liquid Network After Major BTC Withdrawal
- Approximately 4,000 BTC, valued at $320 million, was withdrawn from Blockstream’s Liquid network by white hat hackers on September 6.
- A bug in Sideswap’s Elements software allowed the unauthorized peg-out of 3,996 BTC.
- Blockstream has paused the network and is attempting to contact the white hat hackers onchain.
- Ledger CTO Charles Guillemet expressed skepticism about the hackers’ intentions, noting their unusual request for contact via Signal.
- Samson Mow of JAN3 confirmed that Aqua Wallet’s Liquid functionality is affected but regular Bitcoin transactions remain unaffected.
The incident highlights vulnerabilities in sidechains and raises concerns over security practices within cryptocurrency networks. The pause of a major federated sidechain such as Liquid underscores the potential risks associated with technical bugs and governance issues.
With significant amounts of BTC involved, this event draws attention to the need for robust security measures in blockchain technologies to prevent future exploits.(Source)
