Threshold Pauses tBTC Bridge but Insists Every Coin Is Backed

Threshold Network hit pause on its tBTC bridge and is now trying to calm the room. In an Oct. 31 security update, the team said the token remains fully backed — 4,320 BTC sitting in bridge wallets against roughly 4,185 tBTC in circulation — while new minting and redemptions stay switched off. The Defiant's own check of Bitcoin records on mempool.space found six of the 44 active wallets listed in Threshold's explorer holding a combined 4,320.33 BTC, with Etherscan showing an Ethereum supply of 4,185.16 tBTC.

The team insists nothing walked out the door. Threshold said no funds have been lost and there's been no unauthorized minting. What it didn't say is what actually went wrong. There's no restart date, no explanation of the underlying security issue, and only a promise that bridge functionality comes back once a full remediation is in place.

Until then, the bridge is a one-way street for anyone mid-transaction. tBTC still moves normally on Ethereum and Layer 2 networks, but pending deposits and redemptions will only complete after operations resume. Threshold told users not to send BTC to previously generated deposit addresses or repeat pending transactions, and its Oct. 30 pause notice urged depositors to hold onto receipts and transaction hashes and stay away from alternative interfaces.

The ripple hit DeFi lending right away. Aave's Ethereum Core tBTC reserve, frozen earlier on Oct. 31, stayed frozen with about $136.5 million supplied. Risk provider LlamaRisk said the freeze blocks new tBTC deposits and extra borrowing against the token, while repayments, withdrawals and liquidations carry on — and it stressed the freeze alone doesn't change existing positions' health factors or make them liquidatable.

Over on Morpho, Gauntlet added a tBTC-backed market used by its Ethereum Morpho USDC Core vault to its optimizer's emergency exclusion list. It yanked about 65,000 USDC of available liquidity, leaving roughly 640,000 USDC supplied, with the vault manager warning the redemption pause could dent tBTC liquidity and liquidation exits. Threshold says another update lands within 24 hours, or sooner if something shifts.