Liquid's Attackers Called Themselves White Hats, Ledger's CTO Isn't Buying It

Ledger's Chief Technology Officer has questioned the white hat label attached to the $320 million taken from Liquid Network.

He stopped short of calling it a theft. Liquid described the parties as purported white hat hackers, and Blockstream is trying to reach them on-chain.

Liquid Network Freezes Its Bridge as Self-Proclaimed White Hats Take 4,000 BTC

For context, Liquid is a Bitcoin (BTC) layer-2 network that operates as a separate blockchain. It uses a two-way peg to connect Bitcoin with its native Liquid Bitcoin (L-BTC) asset.

Users lock Bitcoin on the main network to receive an equivalent amount of L-BTC on Liquid. They can later redeem L-BTC for Bitcoin through the network's peg-out process.

In an X post, the team stated that roughly 4,000 Bitcoin left the Liquid Federation wallet. Liquid said the transfer used the SideSwap Peg-out Authorization Key, which it insists was not compromised.

SideSwap explained that a customer sent 4,000 LBTC to its peg-out service at 14:05 UTC, and the federation paid out 3,996 BTC 23 minutes later. Blockstream has since traced that LBTC to a bug in the Elements software, according to the company.

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