Liquid Network Hit by $320 Million Bitcoin Hack

Liquid Network, one of the most popular Bitcoin-based transaction and settlement platforms, has suffered a major cyberattack. Bitcoin worth approximately $320 million was transferred out of the platform’s integrated digital fund, known as the ‘Federation Wallet’. Following the incident on Sunday, all new transactions through Liquid Network have been temporarily suspended to address the situation.

‘White-Hat’ Hackers and the Impact on the Wallet

In a statement posted on social media platform X, Liquid Network said a group claiming to be ‘white-hat’ or ethical hackers had taken the funds. Of the approximately 4,200 bitcoins held in its main wallet, the hackers took control of nearly 4,000 bitcoins.

The company said Liquid Wallet users would be directly affected by the incident. Network authorities apologized to customers for the temporary disruption.

How Did It Happen?

According to preliminary findings, Liquid Network said the funds were withdrawn using an authorized platform called ‘SideSwap’. SideSwap is essentially an institutionally authorized channel for withdrawing funds from the network. However, Liquid Network claimed that the security of the confidential security keys, or digital keys, used to authorize withdrawals had not been compromised.

A major technical investigation is now underway to determine how such a huge amount of Bitcoin could be transferred despite the confidential keys remaining secure. Cybersecurity experts are examining how the security vulnerability within the core system was exploited.

Liquid Network said normal transactions on the network will resume only after a comprehensive review of the entire system confirms that its security measures are fully secure.

//DBTech/BMT/OR//