Alpen Labs CEO Simanta Gautam says his company's AI agents traced and reproduced the flaw behind a roughly $320 million exploit of the Liquid Bitcoin sidechain in about an hour.
On September 6, 2026, Liquid's federation released approximately 3,996 BTC after its network accepted L-BTC that lacked Bitcoin backing. Liquid is a Bitcoin sidechain on which L-BTC is meant to represent bitcoin held in a federation reserve. A validly authorized withdrawal then turned the invalid sidechain state into a real Bitcoin payment worth about $320 million at the time.
According to Gautam, a payout limit imposed before federation signing might have interrupted that exit and prevented the funds from leaving.
Gautam began investigating after hearing of the September 6 attack. In a September 22 account and accompanying technical report, he described how his AI agents diagnosed the root cause and reproduced the failure locally within roughly an hour, providing a detailed explanation of the failed process that allowed unbacked L-BTC to be accepted by the network.
