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Liquid Network pauses operations after hackers withdraw 4,000 BTC
Liquid Network paused operations after suspected white-hat hackers withdrew around 4,000 Bitcoin worth approximately $320 million from a wallet holding BTC backing LBTC tokens. The amount represents about 95% of the network’s Bitcoin reserves, which were estimated at roughly 4,200 BTC before the incident.
According to Liquid’s post on X, the network’s technology provider, Blockstream, is attempting to contact those involved in the incident through a signed onchain message. It remains unclear who was behind the withdrawal and whether they intend to return the Bitcoin.
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One transaction linked to the incident contained the message: “We are whitehats. Contact us on chain.”
How the Bitcoin was withdrawn
According to Liquid, the funds were withdrawn using the SideSwap PAK, an authorization key used to withdraw Bitcoin from the sidechain. However, the network said that neither this key nor any other system keys had been compromised.
Liquid has not yet explained how the suspected hackers were able to use the withdrawal mechanism.
After detecting the incident, the network notified cryptocurrency exchanges. Some platforms have already suspended deposits and withdrawals of LBTC, Liquid’s Bitcoin-backed token. Liquid also temporarily disabled bridge nodes, preventing new transactions from being submitted to the network.
“Effectively, the Liquid sidechain is paused until this issue is resolved,” the developers said.
Other assets were not affected
According to Liquid, the incident did not affect other assets issued on the network, including USDT, DePix and tokenized real-world assets. However, wallet operations may be disrupted because of the network shutdown.
Liquid is a Bitcoin sidechain designed for faster and confidential transfers, as well as the issuance of digital assets. Users lock BTC on the Bitcoin mainnet and receive LBTC on Liquid at a one-to-one ratio.
The Bitcoin backing LBTC is held under the joint control of a group of Liquid operators responsible for maintaining the network’s infrastructure and securing the funds.
Liquid operators are now working to address the consequences of the incident and restore normal network activity. It remains unclear when operations will resume or whether an agreement has been reached with the suspected white-hat hackers to return the funds.
Attacks on crypto projects are becoming more frequent
The Liquid incident comes amid a rise in attacks targeting cryptocurrency projects. According to Immunefi, 207 hacks were recorded in the first half of 2026, the highest number since the company began tracking such incidents. Total industry losses during the period amounted to around $972 million.
CertiK has reported a similar trend. The company recorded 344 incidents in the first six months of the year, resulting in losses of more than $1.3 billion. Excluding the massive Bybit hack, which heavily skewed 2025 figures, losses in the first half of 2026 were about 28% higher than a year earlier. Attackers most frequently exploited code vulnerabilities or gained access to cryptocurrency wallets.
Earlier, the Crypto.com blockchain was shut down after a $75 million protocol hack.
This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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