Key facts
- Blockstream will not pay a ransom for the return of approximately 598.5 BTC, valued at $47 million, stolen from the Liquid Network.
- Hackers returned 3,400 BTC, about 85% of the total taken, after the exploit.
- The exploit involved the withdrawal of about 4,000 BTC, worth roughly $320 million, from the Liquid Network's federation wallet.
- A vulnerability in how Liquid nodes cache range proof verifications allowed attackers to mint unbacked L-BTC and swap it for reserve Bitcoin.
- Blockstream patched the affected bridge nodes within ten hours and released Elements v23.3.4.
- Liquid resumed producing blocks and processing transactions on Thursday, but peg-outs remain disabled.
The Liquid Network has resumed block production following a significant exploit that saw approximately $320 million worth of Bitcoin withdrawn from its federation wallet. While block production is active, transactions and peg operations remain suspended as recovery efforts continue. Blockstream stated it will not pay a ransom demanded by the hackers, calling their actions 'theft' and vowing to work with law enforcement, exchanges, and forensic specialists to trace the remaining 598.5 BTC. The exploit occurred due to a flaw in how Liquid nodes cache range proof verifications, allowing attackers to mint unbacked L-BTC and swap it for reserve Bitcoin. Blockstream patched the vulnerability within ten hours and released Elements v23.3.4, enabling block production to resume on Thursday. The attackers returned 3,400 BTC on Monday, leaving 598.5 BTC unmoved.