Liquid Network hack highlights crypto risks

San Francisco: A blockchain used by several cryptocurrency exchanges to move bitcoin has been hacked for US$320mil, the latest in a spate of breaches to shake confidence in digital-asset security.

Roughly 4,000 of the 4,200 bitcoin held in a wallet used by Liquid Network were taken, the platform operator said in a post on X.

It said the perpetrators appear to be “white-hat hackers” who exploit security flaws and typically return the funds, sometimes in exchange for a fee.

“Liquid wallets will be impacted, and we’re sorry for any inconvenience,” Liquid Network wrote, adding it has halted all new transactions.

“Federation members are actively working on resolving this so we can restore normal network activity.”

Alex Thorn, head of research at crypto firm Galaxy Digital Inc, said in a post on X that the hackers had returned 3,400 bitcoin, apparently keeping some US$47mil worth for themselves.

The hack is the latest in a string of recent attacks that have put crypto cybersecurity in the spotlight. Just last week, an attacker drained US$6mil from a Crypto.com-linked digital-asset lending platform.

In August, a hack of the popular offline bitcoin wallet Coldcard raised questions about the safest way to store the digital asset.

“While these events may shake consumer confidence, they highlight where critical infrastructure safeguards need to be strengthened, and why comprehensive security across the full stack is essential for operators,” said Ziqing Ang, head of policy in Asia-Pacific at TRM Labs.

Liquid Network was started in 2018 by Blockstream Corp, a blockchain technology company co-founded by cryptographer- turned-bitcoin enthusiast Adam Back. — Bloomberg