Liquid Network hack puts Bitcoin’s supporting infrastructure under scrutiny

About 4,000 Bitcoin, worth roughly $320 million, were withdrawn from Liquid Network, a separate system that exchanges use to move and settle Bitcoin more quickly. Liquid holds Bitcoin in a shared reserve and issues an equal amount of L-BTC for use on its own network; when L-BTC is redeemed, the stored Bitcoin is released. The operator says the withdrawal came through an approved payout route and that its keys were not compromised, while identifying a software flaw as the source; it has paused transactions and exchanges have stopped L-BTC deposits and withdrawals. Bitcoin’s main blockchain was not breached, but the incident shows how services built around it can concentrate risk even when the underlying chain remains intact.