Security· ★★★★★· bearish·

Liquid Network Exploit: 4,000 Unbacked L-BTC Issued, $320M in BTC Withdrawn

  • —About 4,000 L-BTC were created without a peg-in in block 4,050,336 on September 6
  • —The federation paid out 3,996.02 BTC, and the reserve fell from 4,200 to 197 BTC
  • —The bug fix was ready on August 3 but was not applied by all nodes
  • —On September 7, the attackers returned 3,400 BTC, leaving ~598.5 BTC outstanding
Why it matters: The incident exposed the vulnerability of Bitcoin sidechains and bridges: a bug in Elements allowed real BTC to be withdrawn, heightening risks for L2 solutions.
#BTC
Source: The Crypto Times
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