Liquid Network Pauses Transactions After $320 Million Bitcoin Withdrawal

Liquid Network, a Bitcoin-based payments and settlement network, has reported a major security incident after approximately 4,000 Bitcoin, valued at about $320 million, was withdrawn from its federation wallet.

The network disclosed the incident on Sunday in a post on X, stating that the Bitcoin had been withdrawn from the Liquid Federation wallet.

Following the incident, Liquid Network temporarily disabled its bridge nodes, preventing new transactions from being submitted to the network.

The move has effectively paused activity on the Liquid sidechain as federation members work to investigate the incident and resolve the security breach.

The circumstances surrounding the withdrawal remain under investigation, with reports describing the individuals responsible as purported “white-hat” hackers.

Liquid Network has not indicated when normal operations will resume, as federation members continue efforts to secure the network and assess the impact of the incident.

The incident highlights the security risks associated with cryptocurrency infrastructure, particularly federation-based systems that manage significant amounts of digital assets.