The sidechain has been halted. The thief, who described themselves as a white hat, called for the bug that enabled the exploit to be fixed
Liquid Network halted new transactions after alleged white hat hackers may have removed bitcoin from the federation’s wallet. The network warned that Liquid wallets would be affected and said federation members were working to restore normal operations.
About 4,000 of the 4,200 bitcoin held in the federation wallet may have been removed. Liquid, launched by Blockstream in 2018, is overseen by a federation of more than 80 exchanges, infrastructure companies and asset managers.
Blockstream attributed the incident to a software bug in Elements, rather than a compromise of passwords or private keys. The funds passed through SideSwap, a trading platform in the Liquid ecosystem. SideSwap said it could not distinguish bitcoin created by the bug from real bitcoin and therefore treated them in the same way.
Other types of assets on the Liquid network may not have been affected. The hacker, communicating on-chain through op-return, said they intended to return most of the removed amount once the bug had been fixed.
