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Liquid Network Says About 4,000 BTC Left Federation Wallet in Security Incident

Realistic newsroom scene: secured Liquid vault, BTC icons leaking from federation wallet, and a paused red sidechain bridge.

Liquid Network said it is dealing with a security incident after roughly 4,000 Bitcoins, worth about $320 million, was withdrawn from its federation wallet. In a post on X, the project said the withdrawal was carried out by “purported white-hat hackers” through the SideSwap PAK, while adding that the key itself was not compromised.

The network said its team is contacting the parties involved on-chain and has notified exchanges to pause LBTC deposits and withdrawals. It also said bridge nodes were disabled and the sidechain was paused while the situation is assessed.

Liquid says other assets were not affected

In the same statement, Liquid said other assets were unaffected. The project also told users to monitor a mempool view for updates as it works through the incident.

The post gives the clearest public account so far of what happened, but it does not explain the underlying vulnerability. For now, the key point is that Liquid has confirmed a large withdrawal from its federation wallet and has taken steps to suspend activity around LBTC while it responds.