Hackers drain 95% of Liquid Network's Bitcoin resereve

00:00 Speaker A

Bitcoin based Liquid Network says $320 million withdrawn and hack. This is going to be a Netflix movie at some point. So liquid is a block stream developed Bitcoin side chain for those of you who don't know.

00:13 Speaker A

Blockstream is founded by Adam Back who many believe was Satoshi Nakamoto. We are talking about the OGs of OGs of Bitcoin, definitely the high priests of this asset class, those who should understand security better than anyone else.

00:29 Speaker A

And once again, oops, you got some explaining to do. Right? What happened here?

00:36 Speaker A

Gosh, I it's so hard to even unpack all these things because it's such nonsense. So, users deposit a Bitcoin into a federation controlled wallet and they receive LBC to use on liquid. So effectively, you have LBC that's backed by LB, that's backed by BTC one for one and then you can go use LBC to earn yield and do other things.

00:55 Speaker A

So, what happened here is a purported white hat, white hat hacker, so luckily this person was a white hat and communicated with them, exploited a bug in elements, which is the software underlying liquid. That bug allowed approximately 4,000 LBC to be created without depositing any actual BTC.