The crypto market faced another eventful day as security concerns, regulatory disputes and exchange troubles dominated headlines.
Bitcoin sidechain Liquid temporarily suspended operations after roughly 4,000 BTC, valued at about $320 million, was withdrawn from its federation wallet by individuals claiming to be white-hat hackers. Meanwhile, Tether-backed Chilean exchange Orionx announced plans to shut down permanently after an audit identified a customer-asset shortfall exceeding $7 million.
In Europe, Poland’s parliament once again failed to overturn President Karol Nawrocki’s veto of a cryptocurrency regulation bill, adding another setback for efforts to strengthen oversight of the country’s digital-asset industry.
Liquid Network Freezes Operations After $320M Bitcoin Withdrawal
Liquid Network halted new activity Sunday after a massive Bitcoin withdrawal raised concerns about a vulnerability affecting the Bitcoin sidechain.
The network announced that its bridge nodes had been disabled, effectively stopping new transactions. Cryptocurrency exchanges were also instructed to suspend, or prepare to suspend, deposits and withdrawals involving L-BTC, Liquid’s Bitcoin-backed asset.
The incident involved approximately 4,000 BTC, worth around $320 million, withdrawn from Liquid’s federation wallet. That represented roughly 95% of the wallet’s estimated 4,200 BTC balance before the incident.
Blockstream, the company responsible for Liquid’s technology, began communicating with the individuals behind the transaction through signed messages recorded on the Bitcoin blockchain.
The parties claiming responsibility reportedly told Blockstream that the vulnerability needed to be patched and that all network nodes should be updated before most of the Bitcoin would be returned. They also provided encrypted technical information about the vulnerability, according to Galaxy Digital research chief Alex Thorn.
At the time of writing, however, the Bitcoin had not been returned.
Elements Bug at the Center of the Incident
SideSwap, whose peg-out service processed the transaction, said the withdrawal appeared to be a normal customer request authorized through its Peg-out Authorization Key.
The company said its PAK was not compromised. Instead, the L-BTC involved in the transaction was allegedly created through a vulnerability in Elements, the open-source software that forms the technological foundation of Liquid.
That distinction is important because it suggests the incident was not necessarily the result of a compromised private key or a direct attack against SideSwap.
Liquid said other assets operating on the network, including USDT, DePix and tokenized real-world assets, were not affected by the incident.
The network remained paused while federation participants worked on identifying and resolving the underlying vulnerability.
The unusual nature of the incident has also created uncertainty over whether the attackers should genuinely be considered white hats. While they claim to have acted to expose and contain a vulnerability, the large-scale withdrawal and subsequent negotiations have prompted skepticism within the crypto community.
Orionx to Permanently Close After $7M Custody Shortfall
Security concerns were also affecting the centralized exchange sector.
Chilean cryptocurrency exchange Orionx, which received backing from Tether, announced that it would permanently shut down following a forensic audit that identified more than $7 million in customer assets transferred to wallets outside the company’s custody.
Withdrawals have been temporarily suspended while the exchange works to recover and return as much customer property as possible.
Orionx has also filed a criminal complaint against former executives and co-founders Roberto Zibert and Joaquín Díaz, who have denied the allegations.
According to local reporting, the disputed transfers allegedly took place between 2018 and 2021.
The exchange had attracted institutional attention in Latin America, with Tether leading its Series A financing round in June 2025 as the stablecoin issuer expanded its regional presence.
The shutdown illustrates the continuing risks surrounding centralized crypto platforms, where users ultimately depend on exchanges to maintain accurate custody records and safeguard customer assets.
Poland Fails Again to Override Crypto Law Veto
Poland’s cryptocurrency regulatory debate also took another turn after lawmakers failed to overturn President Karol Nawrocki’s veto of legislation intended to strengthen oversight of the country’s digital-asset sector.
The Sejm voted 241-198, with three abstentions, in favor of overriding the veto. However, the motion required a three-fifths majority and fell 25 votes short of the necessary threshold.
The result leaves the presidential veto intact and delays the proposed regulatory changes.
The parliamentary vote comes as authorities investigate the collapse of cryptocurrency exchange Zondacrypto, with the case expanding into allegations involving fraud, money laundering and potential political influence.
Prime Minister Donald Tusk has referred to witness testimony alleging payments and attempts to influence politicians associated with Poland’s previous government.
Meanwhile, Zondacrypto’s Estonian operating company, BB Trade Estonia, was declared bankrupt in August.
Polish prosecutors continue to investigate the circumstances surrounding the exchange and allegations connected to its operations.
Three Developments Highlight Crypto’s Growing Pressure Points
The three stories highlight different vulnerabilities across the digital-asset industry.
Liquid’s incident demonstrates how software vulnerabilities can threaten even sophisticated blockchain infrastructure and force networks into emergency intervention.
Orionx’s shutdown highlights the risks associated with centralized custody and the importance of transparency when exchanges hold customer funds.
Poland’s regulatory standoff shows how political disagreements can delay attempts to establish clearer rules for cryptocurrency businesses.
Together, the developments underline a broader reality for the crypto industry: as digital assets become more deeply integrated into financial markets, security, custody and regulation are becoming just as important as price and adoption.
