Liquid Sidechain Paused After Large Bitcoin Withdrawal

The Liquid sidechain, operated by Blockstream, is currently paused after nearly all bitcoin held in its federation wallet was withdrawn. The withdrawal occurred on Sunday, with the recipient explicitly identifying themselves on-chain as a white hat, suggesting an ethical or security-related action rather than theft. Blockstream confirmed that the funds left through a working authorization key, not a stolen one, which indicates a controlled or authorized withdrawal rather than malicious activity. The incident raises questions about the security and operational procedures of the Liquid federation, which is designed to facilitate faster bitcoin transactions and asset issuance on a sidechain. The pause aims to prevent further unauthorized movements and to investigate the circumstances surrounding the withdrawal.