ALERT: Liquid Network effectively halted after alleged whitehat withdrawal of ~4,000 BTC (~$320M) from Federation wallet

AI Market Summary

Liquid Network appears effectively paused after a reported exploit/bug in Elements allegedly enabled unauthorized LBTC issuance and a peg-out of roughly 4,000 BTC from the federation wallet. Even if framed as "whitehat" activity, the event undermines confidence in federated sidechains, custody, and bridge-like peg mechanisms. Near term, it can raise perceived protocol and counterparty risk around BTC-adjacent infrastructure and spill over into broader crypto risk sentiment.

Impact level

● High

Affected assets

BTC/USDT-0.17%

AI Insight · BTC/USDTAI Insight

▼ Bearish

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ALERT: The Liquid Network is effectively paused following reports that alleged whitehat hackers withdrew about 4,000 BTC, valued at roughly $320 million, from its Federation wallet. The incident is said to be tied to an Elements vulnerability that enabled unauthorized LBTC issuance and subsequent peg-outs into real BTC.

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