SideSwap Peg-out Service Exploited via Vulnerability in Elements Software

SideSwap reported that a user successfully redeemed 4,000 L-BTC minted through an Elements software vulnerability. The peg-out service processed the request as valid, resulting in the Liquid Federation paying out 3,996 BTC to the user's address. SideSwap confirmed that its own systems and authorization keys remained secure, but the service could not distinguish the exploited tokens from legitimate L-BTC. As a non-custodial service, user wallets remain unaffected. The Liquid network has been suspended, and all SideSwap exchange and pegging services are pause