An attacker drained 3,998 Bitcoin from the Liquid Network federation wallet after exploiting a consensus bug in the Elements codebase. The vulnerability in confidential transaction validation caching allowed the exploiter to mint 4,000 fake L-BTC tokens, reducing the sidechain's reserves to 197 BTC from an original 4,205 BTC. Liquid paused block production and peg operations immediately following the breach to contain the loss of roughly $320 million.

Blockstream implemented a 3 stage recovery plan and released an emergency patch after 3,400 BTC were returned to the federation. The attacker, claiming to be a white hat, kept 598.5 BTC, or about $47 million, and is demanding a 10% bounty to release the remaining funds. Alex Thorn of Galaxy noted that the security rule intended to prevent this type of minting never applied to this instance.