Sidechain Collapse: Liquid Network Multi-Sig Bypass Nets 598 BTC Unreturned After Partial White-Hat Return

I felt the floor tilt under my desk at 3:17 AM when the first Slack ping hit my phone in Buenos Aires. Liquid Network – Blockstream’s Bitcoin sidechain bridge – had just been gutted. The 11-of-15 multi-signature setup that was supposed to be bulletproof had been bypassed. Funds poured out to a fresh address while the community watched in real time. The attacker walked away with an estimated $4.7 million worth of Bitcoin before some of it trickled back under the condition that the protocol be fixed and nodes updated. 598 BTC remain missing. The rest is a masterclass in how even the most sophisticated Bitcoin infrastructure can be eviscerated when trust is concentrated in 15 companies instead of in code.