An unidentified group has withdrawn approximately 4,000 BTC from Liquid’s federation wallet, representing around 95% of the Bitcoin reserves reportedly held by the network. The incident has prompted Liquid to disable its bridge nodes while an investigation into the underlying vulnerability continues.
The attackers have offered to return most of the stolen funds if Blockstream patches the undisclosed network vulnerability. Communication between the two sides has taken place publicly through Bitcoin OP_RETURN messages and PGP signatures, creating a channel that allows the exchanges to be independently verified.
In response to the incident, Liquid asked cryptocurrency exchanges to suspend L-BTC deposits and withdrawals while the investigation remains ongoing. The move effectively limits activity involving Liquid Bitcoin as the network works to assess the scope and cause of the incident.
At the time of publication, there had been no confirmed repayment of the funds, no publicly released patch from Blockstream and no reopening of the affected network infrastructure. The outcome therefore remains dependent on whether the attackers follow through on their offer and whether the vulnerability can be addressed.
