Transactions halted following withdrawal from Liquid Network wallet
Transfers have been suspended and the fate of the funds remains uncertain following a major withdrawal on the Bitcoin-based network.
In an incident on the Bitcoin-based Liquid Network, the withdrawal of approximately 4,000 Bitcoins, valued at around $320 million, from the federation wallet caused activity on the network. Following this development, new transactions and L-BTC transfers on the network were temporarily halted.
Large Withdrawal from the Federation Wallet
In the incident that occurred on Sunday, nearly 4,000 Bitcoins were removed from the federation wallet, which held approximately 4,200 Bitcoins. This meant that about 95% of the reserves reported by the network were moved from the wallet in a single event.
Transactions and Bridge Nodes Halted
Following the incident, the Liquid Network stopped new transactions from being submitted to the network. With the temporary shutdown of bridge nodes, transfers between Liquid and the Bitcoin mainnet were also suspended.
White-Hat Claim and Investigation
The individuals who took the funds identified themselves as white-hat security researchers in a message left on the Bitcoin blockchain. However, it remains unclear whether the assets will be returned.
Authorization Keys and Technical Review
Liquid Network announced that the authorization keys or other cryptographic keys used in the incident did not fall into the hands of attackers. Initial technical reviews are focusing on a potential vulnerability in the Elements software.