Liquid cryptocurrency exchange

Profile narrative

Liquid is a Japan-based cryptocurrency exchange that provides a platform for users to buy, sell, and trade a variety of digital assets. The exchange supports trading of numerous cryptocurrencies and offers fiat‑currency on‑ramps and off‑ramps, enabling deposits and withdrawals in Japanese yen and other supported fiat currencies. In addition to trading, Liquid operates an Earn program that allows users to earn interest on selected crypto holdings held in the platform’s custodial wallets. The exchange keeps the majority of user funds in cold storage while maintaining a smaller amount in warm wallets to facilitate active trading. This infrastructure design aims to balance the need for liquidity with security considerations.

The exchange’s security history includes two significant incidents that have been publicly disclosed. In August 2021, attackers compromised Liquid’s warm wallets and stole over $90 million across 69 different crypto assets, prompting the exchange to suspend crypto deposits and withdrawals while leaving fiat transactions and trading services operational; the stolen funds included a substantial amount of Ethereum tokens that were later moved through decentralized exchanges in an attempt to avoid freezing. Earlier, in November 2020, a social‑engineering attack on Liquid’s domain provider led to DNS hijacking, the creation of fraudulent login pages, and the theft of employee credentials, which allowed the intruder to access internal email accounts and exfiltrate user personal data such as names, addresses, emails and encrypted passwords, although no funds were taken. These events show how the exchange has prioritized keeping fiat services running during crypto‑related disruptions and highlight its dependence on third‑party providers for domain and DNS security.

Liquid’s status as a Japan‑based exchange means it operates under the country's legal and regulatory regime for cryptocurrency businesses. Being headquartered in Japan typically entails compliance with local anti‑money‑laundering and know‑your‑customer obligations, and the exchange is expected to maintain transparent reporting to regulators. The combination of fiat‑currency gateways, a wide range of tradable crypto assets, and the Earn interest product reflects a specialization in linking traditional finance with the cryptocurrency ecosystem. While the sources do not specify the exchange’s ownership structure or any parent‑company relationships, its operational base in Japan and its track record of responding to security breaches are defining characteristics of its market presence.

Incidents

2 incidents linked to this organisation.