Liquid Network halts operations after $320M 'white hat' security withdrawal

A security withdrawal of about 4,000 BTC, worth roughly $320 million, occurred on Bitcoin layer-two sidechain Liquid Network, temporarily halting network operations. Liquid said the fund outflow was carried out by an actor claiming to be a "white hat" hacker. The investigation found the withdrawal was executed through the anchoring withdrawal authorization key, SideSwap PAK, but the key itself was not leaked or hacked. Other RWA assets on the sidechain, including USDT, were not affected. Deposits and withdrawals of LBTC at major exchanges, along with the submission of new network transactions, are currently blocked. Operator Blockstream and the federation are trying to communicate with the hacker through on-chain signed messages while focusing on resolving the issue and restoring the network.