On October 31, Threshold Network announced a pause of tBTC minting and Bitcoin redemption operations to conduct undisclosed security maintenance. The pause applies to new Bitcoin deposits, token minting, and redemption requests, while existing tBTC can still be transferred across Ethereum and layer‑2 networks.
Threshold reported that its bridge wallets hold approximately 4,320 BTC, which backs the 4,185 tBTC currently in circulation, leaving a reserve of about 135 BTC. The project stated that no funds have been lost and that no unauthorized minting was detected.
Aave’s Response
Following the Threshold announcement, Aave’s risk provider LlamaRisk recommended an immediate freeze of tBTC on Aave’s Ethereum V3 Core market. Aave’s guardian multisig executed the freeze at 10:01 UTC on the same day. At that time, roughly 1,760 tBTC, valued at about $136.6 million, was supplied to the market, representing around 42 % of total tBTC in circulation.
Under the freeze, users can no longer deposit additional tBTC or increase borrowing power with the token. Repayments, withdrawals of eligible collateral, and liquidations continue under existing rules. The restriction applies only to Aave’s Ethereum Core market; tBTC markets on Base and Arbitrum had already been frozen in earlier asset‑removal rounds.
Gauntlet’s Action
Risk manager Gauntlet also acted on October 31, placing its Ethereum Morpho USDC Core vault, which used tBTC as collateral, on an emergency exclusion list. The vault had about 704,000 USDC supplied; Gauntlet withdrew roughly 65,000 USDC, leaving around 640,000 USDC in the market.
Gauntlet warned that the pause could reduce tBTC trading liquidity and affect collateral liquidation processes, especially if tBTC trades at a discount to Bitcoin.
Outlook
Threshold has not disclosed the specific security issue nor provided a timeline for resuming minting and redemption services. The project pledged to issue another security update within 24 hours of the October 31 notice, or sooner if circumstances change. Users have been advised not to send Bitcoin to outdated deposit addresses or repeat pending transactions.
