Aave Blocks tBTC Deposits After Threshold Network Suspension

The Aave protocol has suspended new deposits and borrowing using the tBTC asset on its Ethereum V3 market. This measure follows the Threshold Network's decision to halt operations on its Bitcoin bridge to conduct security maintenance.

The disruption on the Threshold network temporarily prevents the redemption and minting of new tokens. The project states that no funds were lost and that the asset remains fully backed by 4,320 BTC in reserves.

Aave's decision was executed by the protocol's multisig guardian on October 31. The freeze affects approximately 1,760 tBTC, a value representing about 42% of the token's total circulating supply in the market.

Investors can still transfer existing tBTC between the Ethereum network and secondary layers. However, using the token to increase borrowing power or provide new collateral remains unavailable until the bridge resumes operations.

The Threshold Network has not disclosed the specific nature of the security flaw or an expected date for the return of operations. The market is awaiting further updates on system integrity to normalize decentralized financial activities.