Blockstream Deposits 300 BTC Into Liquid, Narrowing Reserve Gap to 250 BTC
Blockstream transferred 300 BTC into the Liquid Federation wallet on November 2, 2026, lifting L-BTC backing to an estimated 94.14%. Peg-out redemptions remain frozen until the remaining 250 BTC shortfall is covered.
Written by CoinArticle’s AI Newsroom · from 2 cited sources. How we work
The Latest Deposit
Blockstream moved 300 BTC into the Liquid Federation wallet on November 2, 2026, according to reporting from The Defiant and Crypto Briefing. After the transfer, the wallet holds 4,018.95 BTC against 4,268.95 L-BTC in circulation, a backing ratio of 94.14%. Before the deposit, the shortfall was about 550 BTC.
Both outlets arrive at the same figures for the reserve position, though they frame the result differently. The Defiant leads with the 250 BTC gap that remains, while Crypto Briefing emphasizes the progress toward full backing. Neither source reports a dispute over the underlying numbers.
Background on the September Exploit
The shortfall traces to September 6, 2026, when attackers exploited vulnerabilities in Elements, the software underpinning the Liquid Network, and withdrew approximately 4,000 BTC. The exploit also left unbacked L-BTC in circulation.
Following negotiations, about 3,400 BTC was returned to the network, leaving an estimated 600 BTC hole. Crypto Briefing reports that Blockstream, led by CEO Adam Back, pledged to cover the remaining shortfall internally rather than pass losses to users. The sources do not give a consistent account of how much of the original gap has been closed beyond the 3,400 BTC return and the November deposit.
Recovery Steps and Security Work
A test transaction of roughly 2.53 BTC moved on October 27, 2026, as an early step in restoring reserves. The 300 BTC transfer is the larger follow-through. Crypto Briefing reports that external security audits were completed by October 20, 2026, and that Blockstream rolled out software upgrades and changed how keys are managed to close the path the attackers used.
What Holders Face Next
Peg-out redemptions stay halted until every L-BTC is matched by native Bitcoin, so holders cannot currently redeem for BTC. At 94.14% backing, the asset is mostly covered but not fully redeemable. Both sources identify two open questions: whether and when the final 250 BTC will be deposited, and when peg-outs will restart once backing reaches 100%.
Why It Matters
For Traders
L-BTC is trading as a partially backed asset until the final 250 BTC arrives, so its redemption value depends on an unscheduled deposit and peg-out restart.
For Investors
Blockstream covering the shortfall internally signals the sponsor is absorbing recovery costs, a factor in assessing counterparty risk on Liquid's federated design.
For Builders
Teams relying on Liquid peg-outs should plan for a frozen redemption path and review the Elements patches and key-management changes before reintegrating.
This article is for information only and is not financial advice. Read the full disclaimer.
