TLDR
Threshold Network paused tBTC minting and bitcoin redemptions on Oct. 31 for undisclosed security maintenance.
Threshold says about 4,320 bitcoin back the 4,185 tBTC in circulation and no funds were lost.
Aave froze new tBTC deposits and borrowing on its Ethereum Core market, where about $136.6 million in tBTC is supplied.
Gauntlet withdrew about 65,000 USDC from a Morpho lending market backed by tBTC collateral.
Threshold has not named the security issue or given a date for redemptions to restart.
Aave has restricted new deposits and borrowing against about $136 million in tokenized bitcoin. The move came after Threshold Network suspended minting and redemptions for its tBTC token.
Threshold paused its bitcoin bridge on Oct. 31 to carry out security maintenance. The project has not said what the security issue is.
tBTC lets bitcoin holders use their coins on Ethereum and other networks. It is often used as collateral for loans in decentralized finance.
Threshold Says tBTC Remains Fully Backed
In an Oct. 31 security update, Threshold said about 4,320 bitcoin sit in its bridge wallets. That compares with 4,185 tBTC in circulation, leaving reserves about 135 bitcoin above supply.
“tBTC remains fully backed, and no funds have been lost,” the project said. It added that investigators found no unauthorized minting of new tokens.
tBTC pause and security update
tBTC remains fully backed and no funds have been lost. Currently, 4,320 BTC sits in the bridge wallets against roughly 4,185 tBTC in circulation, and we’ve seen no unauthorized minting. Reserves can be verified on-chain here:… https://t.co/N8H0JTs5p1
— Threshold Network ✜ (@TheTNetwork) October 31, 2026
Existing tBTC can still be moved across Ethereum and layer-2 networks. New bitcoin deposits, minting and redemption requests are on hold, and pending transactions will be completed once operations resume.
Threshold has not given a date for the bridge to reopen. It said the situation is contained and that full service will return after the fix.
Aave and Gauntlet Limit Exposure
Aave risk provider LlamaRisk recommended an immediate freeze of tBTC on Aave’s Ethereum V3 Core market. Aave’s guardian multisig carried out the change at 10:01 UTC on Oct. 31.
At the time, about 1,760 tBTC worth $136.6 million was supplied to the market. That is roughly 42% of all tBTC in circulation.
Users can no longer deposit more tBTC or use it to increase borrowing power. They can still repay loans and withdraw eligible collateral, and liquidations continue under the same rules.
The freeze only affects Aave’s Ethereum Core market. tBTC markets on Base and Arbitrum were already frozen during earlier rounds of asset removals.
LlamaRisk said it will keep watching collateral positions and trading liquidity. It will recommend restoring normal operations once conditions allow.
Risk manager Gauntlet also acted on Oct. 31. Its Ethereum Morpho USDC Core vault had about 704,000 USDC supplied to a lending market backed by tBTC.
Gauntlet placed that market on its emergency exclusion list. It withdrew about 65,000 USDC, leaving around 640,000 USDC supplied.
The firm warned that the pause could hurt tBTC trading liquidity. With redemptions closed, holders who want native bitcoin must find buyers on secondary markets.
If tBTC trades at a discount to bitcoin, collateral liquidations could become harder for lenders. This risk is higher for markets holding large amounts of the token.
Threshold has told users not to send bitcoin to old deposit addresses or repeat pending transactions. The project promised another security update within 24 hours of its Oct. 31 notice, or sooner if things change.
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