On 6 September 2026, about 4,000 bitcoin — roughly US$320 million at the time, or around 95% of reserves — left the federation wallet that backs the Liquid Network, a Bitcoin sidechain built by Blockstream. The cause was not a stolen key or a weak password: a flaw in Elements, the software that runs Liquid, let the attacker create about 4,000 unbacked L-BTC and convert them into real bitcoin through the normal exit process, the peg-out. The federation's automated checks treated the invalid L-BTC as legitimate.
The party behind it calls the operation white hat and has been negotiating a return through signed messages written on-chain. Blockstream says it has patched and updated the bridge nodes.
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