According to CoinMeta, Liquid Network announced a suspension of operations, and approximately 4,000 BTC (valued at around $320 million) were withdrawn from its federal wallet on September 6, 2026. This withdrawal exposed a software flaw in its peg-out process, and Blockstream along with federal members are investigating the issue. Liquid stated that no peg-out authorization keys were leaked during the withdrawal process, and that this incident did not affect the underlying layer of Bitcoin. Liquid Network also noted that the withdrawal used the peg-out authorization key of Sideswap, but that key and other authorization keys remain secure. This incident has tested Liquid's federal security model, although it did not impact the underlying layer of Bitcoin.