A hacker stole roughly $340 million worth of Bitcoin from a cryptocurrency settlement network before returning most of the funds after the vulnerability used in the attack was fixed.
The incident targeted Liquid Network, a Bitcoin settlement network launched by crypto infrastructure company Blockstream in 2018 and used by cryptocurrency exchanges and other financial institutions. Liquid paused operations following the incident while the issue was investigated.
The attacker has been described as a “white hat” hacker, a term typically used for hackers who identify security vulnerabilities rather than exploiting them for personal gain. In this case, the hacker reportedly offered to return the stolen funds if Blockstream fixed the bug that made the attack possible.
Hacker returns around 3,400 stolen Bitcoin
The hacker reportedly exploited a bug that allowed them to withdraw roughly 4,000 Bitcoin from the network, worth approximately $340 million at the time.
Former Blockstream executive Samson Mow said on September 7 that the bug had since been fixed and around 3,400 of the stolen Bitcoin had been returned. That leaves roughly 600 Bitcoin, worth around $47 million, still under the hacker’s control.
Liquid Network said operations would remain paused while the incident was resolved. Mow added that additional fixes and security improvements would be implemented before the network restarts.
Despite most of the Bitcoin being returned, the initial theft ranks among the largest cryptocurrency heists recorded this year and one of the largest known digital asset thefts to date.
The Liquid Network incident comes just over a month after hackers drained $38 million in Bitcoin from around 500 Coldcard hardware wallets. The attackers exploited a flaw affecting certain Mk3 devices, stealing 594 Bitcoin in just 25 minutes.
Another unusual crypto theft unfolded earlier this year after South Korean authorities seized nearly $5 million in cryptocurrency from a suspected money launderer. Officials accidentally exposed the wallet’s recovery phrase in evidence photos, allowing someone to steal around $4.8 million of the seized funds.