Bitcoin Nears $65,000 Amid Security Alerts from BTCPay Exploit and Potential Fork

Bitcoin's price edged toward the $65,000 mark on Saturday, but the market's attention was focused on two significant infrastructure security risks: a critical vulnerability in the BTCPay Server leading to stolen funds and the potential for a network chain split from a proposed fork.

As of 4:54 AM ET, Bitcoin (BTC) was trading at $64,986.0, a modest increase of 0.61% over the previous 24 hours, according to Investing.com data. The broader cryptocurrency market saw mixed but generally positive movement.

BTCPay Server Exploited

Late Friday, an attacker leveraged a major security flaw in BTCPay Server, a popular open-source payment processor. The vulnerability allowed the unauthorized seizure of credentials used to control Bitcoin Lightning Network nodes running on LND software.

BTCPay's development team confirmed that funds were stolen and issued an urgent advisory for server operators to either immediately upgrade to version 2.4.2 or take their servers offline. The exploit allowed attackers to access "macaroon" files, which act as access credentials for LND nodes, enabling them to control Lightning wallets and transfer funds.

• Confirmed Victims: Hardware wallet manufacturer Foundation reported its BTCPay Lightning node was emptied, though its on-chain hot wallet was not compromised. Bitcoin media outlet Citadel21 also confirmed losses from its Lightning node.
• Scope of Damage: The total amount of Bitcoin stolen and the number of affected operators have not yet been disclosed by the BTCPay project.

Standard on-chain wallets generated within BTCPay were reportedly unaffected by this specific vulnerability. However, any funds stored in the on-chain wallet of the LND node itself may still be at risk.

Potential Fork Creates Replay Attack Risk

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Separately, Bitcoin holders face a potential chain split related to the proposed BIP-110 fork, which could activate this weekend around block 961,632. The proposal aims to temporarily limit non-payment data stored in Bitcoin transactions.

While miner support for the proposal was only around 2.6% on Friday—far below the 55% threshold required—nodes running the BIP-110 software are programmed to automatically reject blocks that do not signal for it. This could result in a minority chain splitting from the main network.

Should a split occur, it would create a risk of replay attacks. A transaction signed and broadcast on one chain could be valid and executed on the other, potentially leading to the unintended loss of the original BTC. Developer Kevin Loaec has advised holders who are unable to separate their assets on the two potential chains to refrain from making transactions until the situation is resolved.

Broader Market reaction

Despite the security concerns, most major altcoins followed Bitcoin's slight upward trend on Saturday.

• Ethereum (ETH) rose 0.32% to $1,916.82.
• XRP gained 0.41% to trade at $1.0353.
• Solana (SOL) saw a more significant increase of 2.16% to $74.78.
• Cardano (ADA) was an outlier, dipping 0.55%.