Threshold Network suspended Bitcoin bridge operations on Oct. 31, prompting Aave to freeze new deposits and borrowing against tokenized Bitcoin on its Ethereum V3 Core market.
Threshold halted tBTC minting and redemptions for undisclosed security maintenance. Aave’s guardian multisig executed the restriction at 10:01 UTC the same day. The protocol stated that “tBTC remains fully backed, and no funds have been lost” and confirmed “no unauthorized token minting” occurred.
The suspension affects $136 million in tBTC supplied to Aave’s Ethereum V3 Core market, representing 1,760 tBTC worth $136.6 million at the time of restriction. That volume equals 42 percent of tBTC’s 4,185 tBTC circulating supply. Threshold holds 4,320 BTC in bridge wallets, a 135 BTC excess over circulating supply.
Existing Aave users can continue repaying loans and withdrawing eligible collateral. Liquidations remain active. New deposits and borrowing are blocked only on the Ethereum Core reserve. Aave’s Base and Arbitrum tBTC markets were already frozen prior to the suspension.
Existing tBTC remains transferable across Ethereum and layer-2 networks. New Bitcoin deposits, minting, and redemption requests are suspended; Threshold said pending transactions will complete when operations resume. The company urged users not to send Bitcoin to previously generated deposit addresses.
Gauntlet, the DeFi risk manager, disclosed exposure in secondary lending markets and moved to reduce it. Gauntlet supplied 704,000 USDC to its Ethereum Morpho USDC Core vault backed by tBTC collateral. The firm withdrew 65,000 USDC in available liquidity, leaving 640,000 USDC supplied after the withdrawal. Gauntlet warned that redemption suspension could affect tBTC secondary-market liquidity and lender exit ability during liquidations.
LlamaRisk, Aave’s risk service provider, will monitor positions and secondary-market liquidity before recommending restoration of the restriction.
Threshold did not disclose the specific security issue prompting the suspension or provide a reopening date. The company pledged another security update within 24 hours or sooner.
