Blockstream Probes Security Breach After 4,000 BTC Leaves Liquid

The Liquid Network sidechain stopped processing transactions on Sunday following a security incident. The issue centered on a bug within the Elements software used by Blockstream. According to information from the atomic swap marketplace Sideswap, the breach allowed an outside actor to remove 4,000 BTC from the network.

Onchain researcher Ergo BTC first spotted the unusual activity. Blockstream is now working to identify the individual responsible, treating the incident as a white hat exploit. The goal is to secure the remaining funds and restore system stability as quickly as possible.

This event highlights the ongoing risks associated with layer two networks and bridge infrastructure. Traders are watching closely to see how Blockstream patches the software flaw and whether they can recover the moved assets. For now, users should exercise caution until the network officially resumes normal operations.