Liquid Network suffers $320M hack as 4,000 BTC drained from federation wallet

Liquid Network reportedly suffered a major security breach in which approximately 4,000 BTC, valued at roughly $320 million, was drained from a federation-controlled wallet. The incident highlights the systemic risk of Liquid’s federated custody model, where compromise of key signers can jeopardize large amounts of bitcoin. The reported loss could undermine confidence in Liquid’s security and raise scrutiny of custodial and sidechain arrangements in the Bitcoin ecosystem.