Aave restricted new deposits and borrowing against tokenized Bitcoin after Threshold Network suspended tBTC minting and redemptions on October 31. The suspension was part of undisclosed security maintenance on Threshold’s Bitcoin bridge.
Threshold reported that the tBTC token remained fully backed, with about 4,320 BTC held in bridge wallets against 4,185 tBTC in circulation, leaving a surplus of roughly 135 BTC. The project said no funds were lost and no unauthorized minting was detected, but it did not disclose the specific security issue or a reopening date.
Existing tBTC continues to be transferable on Ethereum and layer‑2 networks, while new deposits, minting, and redemption requests are on hold until operations resume.
Aave’s response
LlamaRisk, Aave’s risk service provider, recommended an immediate freeze of tBTC on the protocol’s Ethereum V3 Core market. At 10:01 UTC on October 31, Aave’s guardian multisig executed the restriction, preventing additional tBTC deposits or use of the token to increase borrowing power.
At that time, approximately 1,760 tBTC, valued at $136.6 million, was supplied to the market, representing about 42 % of the token’s circulating supply. The freeze applies only to Aave’s Ethereum Core tBTC reserve; markets on Base and Arbitrum had already been frozen in earlier deprecation rounds.
Existing users can still repay loans, withdraw eligible collateral, and liquidations continue under existing risk parameters. LlamaRisk will monitor collateral positions and secondary‑market liquidity before advising on restoring normal operations.
Other DeFi risk managers act
Gauntlet also moved to limit exposure, placing its Ethereum Morpho USDC Core vault on an emergency exclusion list. The vault had about 704,000 USDC supplied to a market backed by tBTC collateral; Gauntlet withdrew roughly 65,000 USDC, leaving around 640,000 USDC supplied.
Gauntlet warned that the redemption suspension could affect tBTC’s secondary‑market liquidity and the ability of lenders to exit positions during liquidations, especially if liquidity deteriorates or a discount to Bitcoin emerges.
Threshold’s guidance
Threshold advised users not to send Bitcoin to previously generated deposit addresses or repeat pending transactions. The project pledged to issue another security update within 24 hours of the October 31 announcement, or sooner if circumstances change.
