Liquid Network Restores Bitcoin Backing After Major Hack
Summary
Liquid Network’s reserves now fully back LBTC at a 1:1 rate, nearly two months after an exploit drained about $320 million in Bitcoin. Deposits, including funds identified by federation board member Samson Mow as coming from Blockstream, restored reserves to roughly 4,270 BTC. The September vulnerability in Liquid’s Elements software enabled attackers to create unbacked LBTC and withdraw Bitcoin; most stolen funds were returned, while a remaining shortfall was covered. BTC/LBTC swaps have resumed, but direct federation withdrawals remain restricted. The federation says governance and security improvements are forthcoming, while details of the replacement funding and the lifting of restrictions remain unclear.
