Liquid Network Hack Drains 4,000 BTC in Major Security Breach

Blockstream’s Liquid Network, one of the oldest and most widely used Bitcoin sidechains, lost roughly 4,000 BTC — worth about $320 million — after attackers exploited a software flaw on September 6. The Liquid Network hack drained the federation’s reserves from more than 4,200 BTC down to just around 197 BTC in a matter of hours, instantly ranking among the biggest security incidents to hit Bitcoin-adjacent infrastructure this year.

Key takeaways

• Liquid Network lost approximately 4,000 BTC (about $320 million) on September 6 due to a bug in the Elements software that powers the sidechain.
• Attackers who called themselves white-hat hackers returned around 3,400 BTC after Blockstream patched the vulnerability, but kept roughly 598 BTC ($47 million) as a self-declared bounty.
• No federation multisig keys were compromised — the flaw sat upstream, in the software that validates transactions before they reach the 11-of-15 signing federation.
• Liquid Network remains paused, with all L-BTC activity suspended across exchanges and no public timeline for resuming normal operations.
• Other assets on the network, including USDT and tokenized real-world assets, were untouched by the exploit.

What triggered the Liquid Network hack and how much was drained