Bitcoin-based payments and settlement platform Liquid Network has suffered a major security breach after about 4,000 Bitcoin, valued at roughly $320 million, was withdrawn from its federation wallet.
The network disclosed the incident in a post on X, describing the attackers as “purported white-hat hackers” and announcing the suspension of new transactions while federation members work to contain the breach and restore normal operations.
Liquid Network said the stolen Bitcoin represented about 95 per cent of the approximately 4,200 BTC held in the affected wallet.
“Liquid wallets will be impacted, and we’re sorry for any inconvenience,” the network said, adding that federation members were working to restore normal network activity.
The affected funds were reportedly withdrawn through SideSwap, a settlement platform authorised to facilitate withdrawals from the Liquid Network.
However, Liquid Network said the cryptographic key used in the transactions had not been compromised, leaving the precise method through which the attackers initiated the withdrawals unclear.
The scale of the incident has heightened concerns over the security of cryptocurrency infrastructure, particularly systems responsible for safeguarding and transferring large digital-asset reserves.
Liquid Network is a Bitcoin-linked blockchain designed to facilitate faster transactions and settlements. It operates through a federation made up of exchanges, infrastructure companies and asset managers.
The latest incident adds to a series of security breaches targeting cryptocurrency platforms, underscoring persistent vulnerabilities surrounding the custody, movement and authorisation of digital assets.
The breach is particularly significant because of the proportion of the federation wallet’s Bitcoin that was withdrawn and the network’s decision to temporarily halt new transactions.
With almost the entire Bitcoin balance of the affected wallet reportedly taken, the incident is expected to intensify scrutiny of the governance, transaction-validation and reserve-management systems supporting blockchain networks.
Liquid Network has not indicated when normal transaction activity will resume but said federation members were actively working to resolve the situation.
The incident also highlights a continuing challenge for the cryptocurrency industry: while blockchain technology is built around security and transparency, vulnerabilities in wallets, settlement mechanisms and supporting infrastructure can expose substantial digital assets to theft.
For investors and regulators, the breach could further strengthen calls for tighter controls over crypto custody, transaction authorisation and real-time monitoring.
Meanwhile, the affected Bitcoin was reportedly moved through SideSwap, with Liquid maintaining that the cryptographic key involved had not been compromised. The precise means by which the attackers gained access and authorised the withdrawals remains unclear.
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