Liquid ‘white hats’ return $270M in Bitcoin as network prepares restart
About 3,400 BTC, worth roughly $270 million, was returned to Liquid’s federation wallet after a security incident that initially drained about 4,000 BTC from the sidechain’s reserves. Samson Mow said the return came after Blockstream confirmed the affected bridge nodes had been patched, leaving about 598 BTC still outstanding. Blockstream said updated software was deployed and federation members were preparing a coordinated restart. Liquid issues L-BTC backed by Bitcoin held by its federation, so the return restored most of the backing removed in the incident. The withdrawal appears to have been executed via SideSwap’s Peg-out Authorization Key, though SideSwap and Liquid said the key was not compromised; SideSwap attributed the issue to a bug in Elements, the software behind Liquid. Blockstream communicated with the actors using signed Bitcoin transaction messages, and the actors claimed they would return most funds after the fix. Liquid remains paused while additional fixes, a chain split resolution, and restart preparations continue.
