Key facts
- The actors behind the Liquid Network security incident returned 3,400 BTC.
- The returned funds are valued at approximately $269.2 million.
- Nearly 600 BTC remains unreturned.
- The hackers claimed to be "white hats" and demanded a fix for a bug.
- Blockstream confirmed that bridge nodes have been patched.
The perpetrators of a security incident involving the Liquid Network have returned a significant portion of the stolen cryptocurrency. Approximately 3,400 BTC, valued at around $269.2 million, was transferred back to the Liquid Federation wallet on Monday. This recovery represents about 85% of the total 4,000 BTC that was withdrawn.
The incident began when a customer sent 4,000 L-BTC to SideSwap’s peg-out service. The actors later identified themselves as "whitehats" in a Bitcoin transaction message, claiming they were exposing a security flaw. They demanded that the bug be fixed before returning the funds.
Blockstream, the developers of the Liquid sidechain, confirmed through a signed message that the bridge nodes had been patched. Following this confirmation, the actors transferred the majority of the Bitcoin back. However, approximately 598.5 BTC, worth about $47 million, remains unreturned.
Despite the return of most funds, Ledger CTO Charles Guillemet expressed skepticism about the "white hat" claim, suggesting the situation resembled extortion. Liquid had disabled its bridge nodes and requested exchanges to suspend L-BTC deposits and withdrawals following the incident. The network has not yet announced when normal operations will resume or how the remaining gap in L-BTC backing will be addressed.