Liquid Global hack — August 2021

Liquid Global, a Japan-based cryptocurrency exchange, said on 19 August 2021 that an unauthorised party had moved cryptoassets out of its 'warm' wallets — internet-connected wallets that hold liquidity for customer withdrawals, sitting between hot wallets and cold storage. The exchange suspended deposits and withdrawals, moved remaining assets to cold storage and said it was tracing the stolen funds and working with other exchanges to freeze what it could.

Published totals differ. Merkle Science, which traced the outflows independently, accounted for over US$81 million across three chains: 107.32 BTC that it valued at $4,307,897, 11,508,516 XRP valued at $13,142,723, and $63,947,036 in ether and ERC-20 tokens, of which about $16.13 million was frozen on-chain. That accounting covers only Bitcoin, the XRP Ledger and Ethereum. Elliptic put the total at US$97 million and its breakdown additionally includes Tron and stablecoin holdings, which is the likely reason its figure is higher. CoinDesk reported at the time that more than $90 million had been taken. A figure of approximately US$91.35 million is widely attributed to Liquid's own accounting; it is recorded here as the best estimate but is not supported by any source cited on this record and should be treated as unverified until a primary Liquid statement is added.

The attacker converted stolen ERC-20 tokens into ether using the decentralised exchanges Uniswap and SushiSwap, which have no ability to freeze assets, and Elliptic traced close to $20 million into the Tornado Cash mixer. Neither firm attributes the theft to any named actor. No arrests have been reported and no government has formally attributed it. Liquid never disclosed how the keys or signing infrastructure were obtained; Merkle Science says only that the hack was most likely caused by the attacker gaining access to the warm wallets' private keys.

On 25 August 2021 Liquid secured $120 million in debt financing from FTX, which CoinDesk reported would be used for the exchange's capital position, to speed up capital generation projects and to provide liquidity.