For artists considering Liquid Editions, this is part of the appeal: 24/7 collecting can continue beyond launch day.
Panorama by @YigitDuman
https://superrare.com/liquid-editions/1/0x74B8174a862B098DB9A44E0C553A3bFa79EF602d
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twitter9/8meme
For artists considering Liquid Editions, this is part of the appeal: 24/7 collecting can continue beyond launch day.
Panorama by @YigitDuman
https://superrare.com/liquid-editions/1/0x74B8174a862B098DB9A44E0C553A3bFa79EF602d
0·-Neutral
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Hanami9/8news
For artists considering Liquid Editions, this is part of the appeal: 24/7 collecting can continue beyond launch day.
Panorama by @YigitDuman
https://superrare.com/liquid-editions/1/0x74B8174a862B098DB9A44E0C553A3bFa79EF602d
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Liquid Network gets back 3,400 bitcoin from white-hat hackers; talks underway for the rest
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Liquid Network gets back 3,400 bitcoin from white-hat hackers; talks underway for the rest. Supposed white-hat hackers behind Sunday’s Liquid Network breach have returned 3,400 of the 4,000 BTC they took, but nearly $47 million in bitcoin is still outstanding.
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COINTELEGRAPH: Liquid 'white hats' return $270M in Bitcoin as network prepares restart
Galaxy Digital Head of Research Alex Thorn said the hackers who stole funds from the Liquid Federation returned 3,400 BTC to the original Liquid Federation address at Bitcoin block height 965,950 after communicating with Blockstream via OP_RETURN. The returned funds represent about 85% of the stolen BTC, while the hackers retained 598.5 BTC, worth roughly $47 million.
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Thoughts on the Liquid whitehat incident:
Background:
- Liquid is a Bitcoin L2/sidechain, launched by Blockstream in 2018. 4,000 BTC from their bridge was taken by a whitehat yesterday (and then mostly returned).
- You can think of the Liquid network as running a fork of Bitcoin Core (called Elements). Elements added new features such as confidential transactions, other assets, BTC peg in/out, and new opcodes.
- The bug seems not to be a cryptography one but in integration logic. Bug A was there for years, was recently patched, and the patch likely introduced Bug B, which was exploited.
- I’m glad this was a whitehat, and most of the funds have been returned. Could’ve been much worse if an actual attacker.
Learnings:
- There should’ve been rate limits in place both at the swap service and peg out. There likely were some limits that didn’t trigger. Such rate limits and time delays can drastically reduce the potential damage.
- It’s clear that we’re in the age of AI-driven security wars. The new capability of these models is forcing us to discover bugs that went undetected for years. Overall, this will be a net positive, even if short-term painful.
- Both the earlier Zcash bug and this Liquid one reinforce how keeping Bitcoin simple and hardened is the right call. If anything, we should be pushing for Bitcoin ossification.
Stacks security:
- I got several questions about Stacks. We also have a bridge for sBTC. The exact Elements bug isn't applicable here, as Stacks doesn’t use Elements. For any bridges or DeFi apps, security should be priority #1. Stacks devs actively run frontier AI models (both open-source and from frontier labs) on our repos. We also have active bug bounty programs with Immunefi and others. Our regular security audit reports are also available publicly.
- Even with the emphasis on security, AI model testing, audits, etc, for over a year, Stacks devs have been pushing in the long-term direction of self-custodial solutions. The Bitcoin bonds/staking upgrade keeps the BTC deployed fully self-custodial (no bridge or smart contract risk). Further, new approaches to self-custodial lending and other areas are in the R&D stage right now.
Summary:
Running the absolute latest AI models on sensitive repos is job #1 for crypto devs. We’ll see a short-term increase in discovered bugs but get hardened systems and healthy practices in the long term.
Stacks is now heavily focusing on self-custodial solutions for bitcoin capital markets, while relentlessly doing defensive security testing/audits on existing infra.
The Liquid incident should be a wake-up call to take AI threats extremely seriously, even at Bitcoin Core (we’ve done some work on this). We should ossify Bitcoin Core and keep it as simple as possible; all new bitcoin functionality can be built on layers like Stacks. Forward!
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Tokenization is accelerating and deeply liquid onchain spot markets will be critical to disrupting TradFi.
Derivatives allow folks to speculate after-hours, but within limits -- they need to derive from something.
Spot markets, with real assets, will change everything.
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Last week in Bitcoin:
→ Bitcoin held the low $80Ks, printing a weekly high near $82K on September 3 (its highest since May) before a blowout August jobs report pushed it back under $80K, up roughly 2% on the week.
→ The Liquid Network was paused after roughly 4,000 BTC (~$320M) left the Blockstream-run Federation wallet via an Elements software bug.
→ The UK's Hargreaves Lansdown opened nine crypto ETNs to its ~2M retail clients, nearly a year after ban was lifted.
→ France's Capital B ran a rare raise-and-buy in a single announcement on September 7, adding 376 BTC via a €30.1M raise to reach 3,521 BTC group-wide.
→ US spot Bitcoin ETFs pulled in $986.9M for the week (third straight positive week, IBIT led at $691.5M).
→ 21Shares said it will commit its own BTC treasury to the Stacks Genesis Bond for institutional Bitcoin staking launching September 10.
→ The CLARITY Act's fate hinges on a September 15 Senate cloture vote needing 60 votes, with stablecoin rewards, ethics rules, and AML provisions still unresolved.
→ Optech #421 advanced post-quantum work with two new proposals (SHRINCS and DropKick) alongside a Core Lightning DoS fix.
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This Week in Crypto (August 31–September 7): Liquid Loses 95% of Its Bitcoin to a Cache Bug, Twenty-One Banks Launch a Dollar, and the House Leaves Two Days After Crypto's Big Vote
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This Week in Crypto (August 31–September 7): Liquid Loses 95% of Its Bitcoin to a Cache Bug, Twenty-One Banks Launch a Dollar, and the House Leaves Two Days After Crypto's Big Vote. The largest crypto theft this week involved no stolen key. Blockstream's Liquid sidechain lost about 95% of its bitcoin on Saturday because a caching shortcut let someone mint coins that were never there, and the federation signed the withdrawal correctly. Elsewhere: twenty-one of the world's largest banks committed to issuing their own dollar, the House cancelled the two voting weeks behind crypto's big Senate vote, and ETFs took $3.8 billion over three weeks while markets priced a two-in-three
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ZEROBASE WEEKLY 8.31–9.6
ZBT traded in a tight $0.080–$0.086 band this week, opening near $0.084 on August 31 and finishing around $0.085 by September 6. The token briefly dipped toward $0.080–$0.081 on September 2 before reclaiming the mid-$0.08s. Trading volumes stayed functional , generally in the $3–$10 million daily range, with liquidity remaining orderly and spreads contained.
The broader crypto market showed more range than the late-August squeeze. Total capitalization moved from roughly $2.59T–$2.63T at the start of the week to a Thursday peak near $2.82T as Bitcoin cleared $81,000, then settled back in the $2.67T–$2.79T area. That is a constructive but incomplete recovery from the mid-year trough near $2.3T.
Bitcoin opened the week near $78,550 on August 31, slipped to a weekly low around $76,250 on September 2, then ripped to a three-month high above $82,200 on September 3. It faded to the high-$79,000s after Friday’s jobs print and closed the week near $80,300–$80,350 — a net gain of about 2% from Monday’s open and roughly 5% from the weekly low. Ethereum moved in a narrower channel: from about $2,467 on August 31, down toward $2,356–$2,390 midweek, then back to $2,510–$2,516 by Sunday, a modest gain of around 2% on the week and about 6–7% from the low.
Derivatives confirmed the move was a squeeze, not a clean leverage rebuild. On September 3, 24-hour liquidations ran $400–$510 million, with shorts accounting for the bulk — roughly $345–$415 million of short liquidations that session, including about $162–$174 million in Bitcoin shorts. Open interest remained elevated near $54 billion on Bitcoin perps. Funding stayed near neutral to only mildly positive after the squeeze, suggesting traders were covering rather than aggressively adding new longs.
Macro and geopolitics were the week’s real drivers. The U.S.–Iran conflict, now in its seventh month, intensified again. Washington struck IRGC sites on the Iranian mainland early in the week, and both sides targeted vessels around the Strait of Hormuz. Hormuz traffic stayed depressed at roughly 10 commodity ships per day versus more than 130 pre-war. Oil responded immediately: WTI rose nearly 10% on the week to settle around $91.48 on Friday, while Brent gained about 7.6–7.8% to $96.28. Diesel hit a U.S. retail record near $5.85 a gallon. Energy inflation is no longer a one-day shock; it is a persistent input into the Fed’s reaction function.
Friday’s August employment report then flipped equity and rate markets. Nonfarm payrolls printed +162,000 versus a ~56,000 consensus, with prior months revised up by 55,000. Unemployment held at 4.1%. The 10-year yield finished near 4.78% and the 2-year near 4.37%. Markets immediately repriced the odds of a September rate hike higher. U.S. equities finished mixed for the week: the S&P 500 eked out a 0.1% gain to 7,718.60, the Nasdaq Composite rose 0.4% to 26,506.99, and the Dow fell 0.3% to 53,414.25. Friday itself was risk-off — S&P −0.38%, Dow −0.51%, Nasdaq Composite −0.29% — after the jobs surprise. Chip names limited the Nasdaq damage; credit-sensitive and consumer names did not.
Institutional crypto flows remained the structural offset. U.S. spot Bitcoin ETFs took in about $987 million net for the week ending September 4/5, extending a three-week streak to roughly $3.8 billion. The path was uneven: +$217 million on August 31, −$236.5 million on September 1, then +$101 million, a standout +$731 million on September 3 (largest single day since mid-January), and +$175 million on September 4. BlackRock’s IBIT again absorbed the majority. Ethereum ETFs added about $215 million, down ~74% from the prior week’s $816 million. Combined BTC+ETH ETF inflows were still ~$1.2 billion. Bitcoin ETF AUM sat near $101 billion. Year-to-date BTC ETF flows remain slightly negative, so this is repair, not a new cycle high in sponsorship.
Crypto-native news reinforced a rotation beneath Bitcoin. Zcash led the tape, breaking $1,000 and later trading above $1,150–$1,200 with a weekly gain approaching 40%, helped by ETF interest and a short squeeze. Uniswap jumped more than 50% on the week as DeFi breadth improved. Arbitrum ripped on Robinhood Chain activity.
Elsewhere: Liquid Network paused after a purported white-hat withdrawal of $320 million in bitcoin; Trezor said a ShipMonk breach affected tens of thousands more customers; the SEC floated a “Regulation Crypto Assets” framework with offering exemptions; and OpenReserve received preliminary OCC approval for a national bank charter. Privacy coins and infrastructure names outperformed beta.
Crypto Fear & Greed spent the week in greed, not fear. The index rose from 62 on August 31 to 69, 63, 65, then 74 on September 4, and held 73–74 into the weekend. Seven-day average was about 68; 30-day average about 54. Sentiment has flipped from the August mid-20s/30s readings, which is consistent with the price rebound but leaves less cushion if oil or the Fed surprise again.
On-chain data was more mixed than the ETF tape. Long-term holders are no longer in the aggressive distribution regime of earlier 2026, but they are not uniformly accumulating either. Whale flow flipped toward net exchange deposits later in the week (roughly +1,900 to +3,900 BTC on some sessions), and tracked large holders rotated size rather than simply stacking.
Dormant supply stirred: 2013-era wallets moved hundreds of BTC in early September, including a coordinated 200 BTC burst on September 5, while 2011 coins worth more than $7 million also woke up. OG five-year+ UTXO spend, on a 90-day average, rose toward ~1,500 BTC — higher than May, but still well below prior capitulation spikes. The read-through is consolidation and wallet hygiene more than a coordinated dump, yet it is not the one-way accumulation signal of a clean breakout.
In summary, August 31–September 6 was a squeeze week inside a still-contested macro regime. Spot Bitcoin and Ethereum recovered from the $76k / $2,360 area, ETF demand stayed real, and alt breadth improved via ZEC, UNI, and privacy/infrastructure names. Against that, Hormuz risk pushed oil to three-month highs, Friday’s 162k jobs print revived hike odds, U.S. equities stalled, and on-chain whales stopped being net buyers into strength.
The market is consolidating in the $80,000 Bitcoin / $2,500 Ether zone with institutional bids underneath and energy-geopolitical risk overhead. Next week’s CPI and the September FOMC path matter more than last week’s liquidations.
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⚠️ Exploit breakdown:
Sept 6: @Liquid_BTC got hit through an Elements consensus / asset-validation bug. Attacker minted ~4,000 unbacked L-BTC, then used SideSwap’s normal peg-out flow to cash out 3,996.01834922 BTC from the Liquid Federation reserve.
They called it whitehat and said funds come back after every node is patched. Still sitting. No return.
📌 IOCs
Attacker:
https://mempool.space/address/bc1qgslsydz56d0ed6827hdemfmk5w2f6ldyc6wt7p
Collection wallet:
https://mempool.space/address/bc1ql4mfu6aundtkksxklfajs2h3t9nzcd6gyqjlte
Hit reserve:
https://mempool.space/address/bc1qdlld6antmv4xug242ed83q7k4rqw50cwfns38szx4qu2f4jwaxxsuhwxxr
🔍 How it played out
1. Phantom L-BTC
Liquid block 4,050,336 (2026-09-06 21:53:10 CST) was accepted by Federation / Blockstream nodes. http://mempool.space’s independent Liquid node rejected it and stalled on the prior block. Clean consensus split.
Suspect mint:
https://blockstream.info/liquid/tx/c652a1047ff549698b09242a66e20f6e9a044d5c972419342fa552b0856ba674
2. Peg-out via SideSwap
3,996.01834922 BTC paid to bc1qgsls...c6wt7p
https://blockstream.info/liquid/tx/ce4caece413cd9d444ce7ed9f54e5b328b3da5e4af301aff59a3571f76e988f2
Blockstream later said the L-BTC came from an Elements bug. SideSwap PAK + infra were not compromised.
https://x.com/side_swap/status/2096709838310928674
3. Federation pays on Bitcoin L1
https://mempool.space/tx/8db751a650ae2f12006b7e8c69a75e4df360e8afd6b9e05ae0b9fa6458a7b140
4. Funds swept
https://mempool.space/tx/85d2ca15bea33a592e73ed40c6a5da887feecf1e77f58ec7f580e00841645043
5. On-chain note
OP_RETURN: “we are whitehats. contact us on chain.”
Also told Liquid to patch first, then they’d return funds — and even sent the project fix details. Comedy/taunt meter is maxed. Whitehat claim is shaky. Reads more like buying time.
https://mempool.space/tx/83825b2135dd0abac12c9dfe17f29ab81b3427e1ae864947b0bebce5e47c3c4b
🧠 Impact
▪️ Hit: Liquid Network / Federation BTC reserve
▪️ Loss: 3,996.01834922 BTC (~$320M at the time)
▪️ Reserve left: ~197.4719 BTC. ~95% of the stack walked
▪️ Bitcoin L1: not exploited. Mainnet just executed a Federation-signed payout
▪️ SideSwap: used as the peg-out rail. Official word is PAK + systems were not breached
▪️ Other Liquid assets: USDT, DePix, RWAs were not weirdly minted, but the pause still froze transfers + liquidity
▪️ Recovery: principal still sits on the collection address. No CEX, no mixer, no bridge. Better recovery odds than a washed drain — until it’s actually returned, treat it as unrealized loss
▪️ Attacker label: self-claimed whitehat, unknown actor. Parking nine figures and then asking to talk is not standard responsible disclosure.
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COINTELEGRAPH: Bitcoin sidechain Liquid pauses after purported 'white hats' withdraw $320M in BTC
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BUSINESS TIMES SG: Bitcoin-based Liquid Network hit by US$320 million hack, halts transactions
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BUSINESS TIMES SG: Bitcoin-based Liquid Network hit by US$320 million hack, halts transactions
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BUSINESS TIMES SG: Bitcoin-based Liquid Network says US$320 million stolen in latest crypto hack