Liquid Network Hacked for 4000 BTC as Attackers Claim White Hat Role

The Liquid Network recently suffered a significant security breach where 4,000 Bitcoin left the project's federation wallet. This amount represents roughly 95 percent of all Bitcoin pegged to the sidechain. In response to the incident, the network disabled its bridge nodes to prevent further outflows, and major exchanges have suspended transactions involving L BTC.

The parties responsible for the transfer consolidated the funds into a specific Bitcoin address. They attached a message to the transaction claiming they are white hat hackers and requested that Liquid contact them on chain. While this term usually describes security experts who find bugs to help projects, many in the industry remain unconvinced.

Ledger Chief Technology Officer Charles Guillemet publicly questioned the claim. He noted that the behavior mimics past major exploits, such as the Ronin bridge hack, rather than standard responsible disclosure practices. He pointed out that legitimate security researchers typically do not drain massive amounts of funds while leaving the project scrambling for answers.

As of now, the funds remain in the attacker's wallet. There is a small glimmer of hope, as a later on chain message from the address asked if returning most of the Bitcoin to the federation would be an acceptable outcome. Investors are now waiting to see if the actors follow through with this promise or if the funds will move elsewhere.