Liquid Network resumes block production after $320M exploit

The Liquid Network has resumed block production following a $320 million Bitcoin withdrawal, although transactions and peg operations remain suspended as recovery efforts continue.

Peg operations, including PAK-authorized peg-outs, remain suspended while the network works to restore its BTC/L-BTC reserve.

$270 million in Bitcoin returned after exploit

Liquid paused operations on Sept. 6 after actors claiming to be white-hat hackers withdrew about 4,000 Bitcoin (BTC), worth roughly $320 million, from the network’s federation wallet.

The withdrawal represented about 95% of the wallet’s roughly 4,200 BTC balance and involved L-BTC originating from a bug in Elements, the open-source software underpinning Liquid.

The actors subsequently returned 3,400 BTC, worth about $270 million at the time, after Blockstream confirmed that affected bridge nodes had been patched. About 598 BTC, worth roughly $46 million at current prices, remained outstanding as of Sept. 7.