Liquid Network Comes Back Online After Bitcoin Exploit
The attacker returned 3,400 BTC after draining nearly all of Liquid’s reserves, while legal experts questioned whether the demand was extortion.
- On September 6, 2026, an unknown attacker exploited a software vulnerability in the Liquid Network, draining approximately 4,000 BTC valued at around $320 million—roughly 95% of the federation wallet's total reserves.
- The exploit originated from a bug in Elements, the open-source software powering the Liquid Network, which allowed the attacker to create approximately 4,019.4 fake L-BTC tokens that federation servers erroneously treated as legitimate deposits.
- Following on-chain negotiations across multiple Bitcoin blocks, the attacker returned 3,400 BTC to Blockstream after bridge nodes were patched, but retained approximately 598.5 BTC worth roughly $47 million as a "bounty."
- Liquid resumed block production on Thursday, September 10, 2026, operating "without transactions" as a precaution while the network remains monitored to "confirm full stabilization," with peg operations suspended.
- Legal expert Alena argued that demanding a ransom for vulnerability fixes constitutes extortion, potentially carrying up to 20 years of imprisonment, as the incident sparked debate regarding whether users will trust Liquid with their assets.
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Cointelegraph
The New York LedgerLiquid Network Comes Back Online After Bitcoin Exploit
Liquid restarted block production after deploying emergency software updates, though transactions and peg operations remain suspended as recovery efforts continue.
Liquid Network Hacked: $320M Bitcoin Drained in 2026 Exploit
An attacker exploited a software bug in Liquid Network to create unbacked L-BTC tokens, draining 4,000 bitcoin ($320 million) from reserves. They returned 3,400 BTC but kept $47 million as a "bounty." Here's how the exploit worked, why Liquid's security model failed, and what it means for Bitcoin's sidechain future.
Liquid Network restarts block production after $320M exploit
The Liquid Network has restarted block production after a major Bitcoin withdrawal tied to a vulnerability in Elements, the open-source software that underpins the sidechain. Liquid said it is bringing the system back in a cautious, staged way—enabling block creation while keeping transaction processing and peg operations paused as it continues recovery and monitoring. In [...]
Liquid Network resumes block production after $320M exploit caused 95% reserve drawdown
The exploit highlights vulnerabilities in federated blockchain models, raising concerns about security and trust in decentralized finance systems. The post Liquid Network resumes block production after $320M exploit caused 95% reserve drawdown appeared first on Crypto Briefing .
Following the major hacking that siphoned a large part of the collateral of the Liquid network and then the return of 3,400 BTC to the federation, the SideSwap platform published an official communiqué to clarify its involvement in the incident of 6 September 2026. The company acknowledges its share of responsibility, explaining that two of the [...] Read article Liquid Hack: SideSwap recognizes its faults without clearing the federation appeare…
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