SideSwap Resumes Bitcoin Swaps While Liquid Reserves Remain Locked

SideSwap has reactivated conversions from the synthetic L-BTC token to Bitcoin. This measure follows the identification of a verification cache flaw in the Elements network that created approximately 4,000 unbacked L-BTC units in September.

Current payments are being processed directly from SideSwap's own Bitcoin wallet. The company has processed over 60 BTC across roughly 600 operations since October 20. The conversion process maintains the standard 0.1% fee on the swapped amount.

Direct withdrawals through the Liquid Federation remain suspended. The Federation is still working on the full restoration of the one-to-one backing between assets. SideSwap is refilling its wallet partially and manually to support new swaps.

The system may generate waiting queues if the provider's wallet requires refills. The company states that pending requests are not lost and follow a first-come first-served basis. There is no set deadline for the completion of these queued payments.

This instability in custody and liquidity infrastructure increases operational risk for those using synthetic assets. Reliance on third-party swap mechanisms instead of direct withdrawals raises uncertainty regarding the immediate availability of capital during market stress.