Liquid Network Hit by Security Incident, Around 4,000 BTC Transferred Out by 'White Hat Hackers,' Sidechain Paused The official Liquid Network account has confirmed a security incident where approximately 4,000 BTC (around $320 million) was transferred out of the Liquid Federation wallet. The sender left an on-chain message claiming to be 'white hat hackers.' The Blockstream team is attempting to contact them via signed messages. According to the official disclosure, the funds were transferred using SideSwap's PAK (Peg-out Authorization Key), but the key itself was not compromised, and no other keys were leaked. Several exchanges have already been notified and have suspended (or are about to suspend) LBTC deposits and withdrawals. Other Liquid assets like USDT, DePix, and RWA remain unaffected by this incident. Bridge nodes have been temporarily disabled, new transactions cannot be submitted, and the Liquid sidechain is currently paused until the issue is resolved. On-chain data shows the transfer was completed in a single transaction, with the original address holding approximately 3,999.99999857 BTC splitting into two outputs: 2.49749857 BTC and 3,998.49748445 BTC. The transaction included an OP_RETURN message stating, 'we are whitehats, contact us on chain.'