Industry News

Liquid Network Recovers from $320M Hack, But Full Bitcoin Withdrawals Still Frozen

AMBCrypto · 18 Sept 2026

Key Takeaway Businesses using crypto-based payment rails should monitor official recovery updates closely and avoid relying on withdrawal functions until providers confirm full restoration.

Liquid Network, a Bitcoin-based sidechain, has resumed most normal operations following a $320 million hack disclosed on 6th September. Block production and standard transactions have been running since 10th September, allowing users to move LBTC (a Bitcoin-pegged asset) across the network again. Ecosystem partners including Mifiel and Aqua have also restored services such as digital promissory note processing, liquid asset transfers, and peg-ins.

However, one critical function remains suspended: peg-outs, which let users convert LBTC back into regular Bitcoin. This matters because roughly 4,000 BTC was withdrawn during the incident, and while approximately 3,400 BTC has since been returned to the Federation reserve, around 600 BTC is still unaccounted for. Until the remaining funds are recovered, services requiring users to move Bitcoin out of the network will stay restricted.

On a positive note, the technical root cause of the exploit has been identified and an immediate fix released through Elements v23.3.4, the underlying software that powers Liquid. Full recovery will depend on restoring bridge functions, peg-outs, and exchange support so users can move both LBTC and BTC freely once again.

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Summarised by CISO AI from AMBCrypto. We link back to every original so you can read it yourself.