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Liquid Network Restores Peg Operations After Security Incident Involving 600 BTC Shortfall

Realistic scene of Liquid Network peg restoration, featuring a secure vault with BTC symbols and a central network emblem radiating trust

Liquid Network has begun restoring Bitcoin peg operations after a security incident that left the federation facing a shortfall of about 600 BTC. The project’s official account said user swap functionality has been restored, with semi-automated swaps now available for federation members as key technical steps are completed.

In a separate post, Liquid executive Samson Mow said an external security audit has been completed and additional hardening measures have been put in place. He said peg operations are resuming and that users can peg out through SideSwap and AquaBitcoin while the federation works to restore full 1:1 backing.

Phased recovery follows audit and added safeguards

The restoration is being handled in stages rather than all at once. According to the official update, normal peg and balance validation are expected to be reinstated soon, while the network continues security hardening in the background.

Mow said the remaining shortfall of roughly 600 BTC will be added to the federation wallet in the coming days. The posts did not indicate that the recovery is complete, only that the process is underway and the network is moving back toward normal operations.

The incident put the Liquid Network’s peg process under temporary strain, but the latest updates suggest the system is returning to service with new checks in place. For users, the immediate change is that swap activity is back in limited form, while the federation continues work toward full restoration.