Hackers breach Bitcoin-based Liquid Network, withdraw $320 million

Liquid Network, a Bitcoin-based payments and settlement network, has reported a security incident after purported white-hat hackers withdrew about $320 million worth of Bitcoin from its federation wallet.

The network made the revelation on Sunday on X, disclosing that approximately 4,000 BTC had been withdrawn from the Liquid Federation wallet.

Liquid Network has temporarily disabled bridge nodes, preventing new transactions from being submitted to the network and effectively pausing the Liquid sidechain while federation members work to resolve the incident.

What Liquid Network is saying

Liquid Network said the funds were withdrawn via the SideSwap PAK (Peg-out Authorization Key), but stressed that the key used in the process was not compromised.

• “Purported white-hat hackers have withdrawn ~4,000 BTC (~$320 million) from the Liquid Federation wallet,” Liquid Network said.
• “What we know so far is that the funds were withdrawn via the SideSwap PAK (Peg-out Authorization Key), but that key was not compromised, nor were any others,” it added.

The Blockstream team is working to contact the parties involved on-chain using a signed message, according to the network. The network has not publicly identified the parties responsible for the withdrawal.

Liquid Network also said exchanges had been notified and had already paused, or would pause, LBTC deposits and withdrawals.

• “Effectively, the Liquid sidechain is paused until this issue is resolved,” the network said.

The network also warned that Liquid wallets would be affected by the disruption.

• “Liquid wallets will be impacted, and we’re sorry for any inconvenience,” Liquid Network said.

Get up to speed

The Liquid Network incident follows a series of major security breaches and exploits that have resulted in significant losses across the cryptocurrency industry.

• In February 2025, Nairametrics reported that Bybit lost about $1.4 billion in Ethereum in what was then the largest crypto theft on record.
• By December 2025, Nairametrics reported that more than $3.4 billion worth of cryptocurrency had been stolen during the year, with a small number of major attacks accounting for a large share of the losses.
• More recently, in August 2026, Nairametrics reported that an attacker drained at least $6 million from Tectonic, a decentralised lending platform, after artificially inflating the value of its native token and using the inflated assets as collateral.

What you should know

The Liquid Network incident comes as cyber threats across Africa are becoming more sophisticated, with attackers increasingly using artificial intelligence and targeting digital infrastructure.

• In August 2026, Nairametrics reported that AI was enabling 55% of reported cybercrimes across Africa, according to INTERPOL’s African Cyberthreat Assessment Report 2026.

The report also found that financial losses from cybercrime on the continent more than doubled from $192 million in 2024 to $484 million in 2025.