SECURITY

Hackers drain $320M in Bitcoin from Liquid Network, claim they're the good guys

Self-described white hats promise to return 'most' of the 4,000 BTC once the vulnerability is fixed

Hackers have drained roughly $320 million in Bitcoin from the federation wallet backing the Liquid Network, while claiming to be the good guys.

Liquid, a Bitcoin sidechain developed by Blockstream and used by exchanges and other financial institutions, said in a post on X on Sunday that around 4,000 BTC had been withdrawn from its federation wallet by what it cautiously described as "purported white-hat hackers."

The wallet held about 4,200 BTC before the incident, meaning whoever was behind the exploit removed roughly 95 percent of its holdings.

Liquid disabled its bridge nodes while federation members investigate and asked exchanges to suspend L-BTC deposits and withdrawals.

The people behind the withdrawal, meanwhile, appear keen to establish that this isn't your standard crypto heist.

In a message embedded in a Bitcoin transaction, they identified themselves as "whitehats" and asked Blockstream to get in touch. Blockstream responded on-chain with contact details for its security team, and Liquid said the parties subsequently moved their communications to encrypted channels.