Bitcoin-Linked Blockchain Suffers $320 Million Hack

A bitcoin-linked blockchain used by cryptocurrency exchanges has been hacked, resulting in the theft of 320 million dollars (approx. 430.8 billion KRW) worth of bitcoin, severely shaking trust in digital asset security.

The Liquid Network, a blockchain designed for faster transactions, revealed in a post on X (formerly Twitter) on the 7th (local time) that approximately 4,000 out of the 4,200 bitcoins stored in the Liquid Federation wallet were stolen.

The Liquid Network stated, "The perpetrator is posing as a 'white hat hacker' who claims to have discovered a vulnerability in the network, moved the funds, and taken a fee before returning them."

The company apologized, saying, "We apologize for the inconvenience caused to users," and suspended all new transactions.

It added, "Member companies are actively cooperating to resolve the issue so that normal network activity can be restored."

The Liquid Network was launched in 2018 by Blockstream, a blockchain technology company co-founded by Adam Back, a cryptographer turned bitcoin enthusiast.

It currently operates as a federation with participation from more than 80 exchanges, infrastructure companies, and asset management firms.

To address the issues of delayed transactions and high fees caused by congestion on the main bitcoin blockchain, the Liquid Network enables fast transactions by issuing Liquid Bitcoin (L-BTC) instead of locking up actual bitcoin.

BTSE and Bitfinex, whose parent company is Tether, the world's largest stablecoin issuer, also use the Liquid Network.

BitMEX, which announced it is closing this month, also uses the Liquid Network.

The Liquid Network stated in its post that the funds were withdrawn through SideSwap, a payment platform that oversees network transfers, but that private keys were not leaked.

Anerin Flynn, CEO of cybersecurity firm Failsafe, told Bloomberg on the 7th (local time), "Initial investigations suggest this appears to be a bug that arbitrarily issued L-BTC," adding, "This incident, in which about 95 percent of deposited assets were drained and the network was halted, exposes critical vulnerabilities in the verification and asset custody methods of the Liquid Network."

Previously last week, 6 million dollars were withdrawn from a digital asset lending platform linked to Crypto.com, and last month, the well-known offline bitcoin wallet Coldcard was also hacked.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.