Liquid Hack

TOTAL LOST $97.0M
High #81 All-Time Access Control

Summarize with AI

ChatGPT Perplexity Claude Grok
Affected Chain 2021 Incident surface
Recovered - No recovery reported
All-Time Rank #81 By amount stolen
Auditors 1 Prior security audit

Incident Overview

Quick Summary

Liquid exchange platform announced it suffered a hack and lost over 90,000,000 $USD worth funds in $BTC, $TRX, $XRP, $ETH, and some ERC-20 tokens.

Details of the Exploit

Liquid is a Japanese crypto-fiat exchange platform. According to the announcement on platform's Twitter, the exchange’s hot wallets were compromised and the Liquid team proceeded to move funds to cold storage:

https://twitter.com/Liquid_Global/status/1428176357515612165

The first batch of addresses initially reported by Liquid included the following 4 crypto addresses:

BTC: 1Fx1bhbCwp5LU2gHxfRNiSHi1QSHwZLf7q (received 107 BTC);

ETH: 0x5578840a…b59946 (received around $60 million in ETH and ERC-20);

XRP: rfapBqj7rUkGju7oHTwBwhEyXgwkEM4yby (received more than 11 million XRP)

TRX: TSpcue3bDfZNTP1CutrRrDxRPeEvWhuXbp

The hacker deposited the stolen XRP to centralized exchanges such as Huobi or Poloniex and then changed it to BTC sent on 2 identified addresses:

12PKkwoFkXp6JtN7roWRA2gSitE6nVDds4 (92 BTC)

1JW1tcBXp1vZ6KGEirFNSXb5RgZSaL63Av (100 BTC)

The hacker is also using a mixing service and sent more than 9,000 ETH from the address 0x5578840a…b59946 to Tornado Cash mixer.

Besides, the other address reported by Liquid (0xff0f573b…06b711), the hacker is using decentralized exchanges (DEXs) such as Uniswap to swap tokens to ETH as shown below.

This is classified as a Access Control Attacks . Compare similar hacks →

Incident Report

Protocol / Project Liquid
Date of Incident
Attack Technique Access Control
Classification CeFi
Primary Source View Post-Mortem

Protocol Information

Protocol Type Dexs
Official Website www.liquid.com/
Protocol Twitter/X @Liquid_Global
Team Anonymous
Source Code Unverified

Market Context at Time of Hack

Protocol Links

What the Attacker Needed to Succeed

Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.

Technical Knowledge Operational-security tradecraft (phishing, malware, leaked seed phrases, or insider access) to obtain treasury signing authority
Capital Required Minimal capital - only enough to cover gas while draining the compromised accounts
On-Chain Access Valid signing authority over the compromised wallets / multisig signers, allowing direct transfer of funds or stake authorization
Target Reconnaissance Identification of Liquid's high-value treasury accounts and the authority / multisig structure controlling them
Execution Speed Speed to drain the compromised accounts before the team detects the breach and revokes signing authority or freezes the assets
Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Likely — with a thorough Access Control audit checklist and test coverage
Audited by Audit Report 1 — still lost $97.0M. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to Liquid, these are the critical security checks that could have prevented this incident (August 2021).

  • Verify all logic paths related to Access Control are guarded by proper access controls and input validation - see the Access Control Attacks attack class for patterns
  • Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.

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Security Audit History

Related Attack Classes

The technique used in this hack maps to these vulnerability classes in our security curriculum:

See all Access Control Attacks examples →

Access Control Attacks

Sources & References

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