Liquid Network Hackers Offer to Return ~$320M in Bitcoin After Bug Fix
Hackers who drained approximately 4,000 BTC from the Liquid sidechain said they will return most of the funds once Blockstream patches the underlying vulnerability and deploys fixes across all nodes. The conditional return marks an apparent white-hat disclosure, though no repayment has been confirmed.
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Withdrawal and Offer
Hackers withdrew roughly 4,000 BTC from the Liquid Network, valued at approximately $320 million at current prices. The attackers, presenting themselves as white hats, said in communications that they will return most of the withdrawn Bitcoin once Blockstream—the company that maintains Liquid—identifies and patches the bug and deploys the fix to every node on the network.
Conditions for Return
The group did not specify an exact timeline or amount to be returned, only stating they would restore "most" of the funds. They framed the withdrawal as a disclosure mechanism to force attention to the vulnerability rather than as a theft. No repayment has been confirmed as of publication. Blockstream has not yet issued a public statement detailing the scope of the vulnerability or its remediation plan.
Why It Matters
For Traders
The temporary removal of $320M in BTC from Liquid reduces liquidity on the sidechain and may widen spreads on L-BTC trading pairs until the return is confirmed.
For Investors
A material bug in a major Bitcoin sidechain raises questions about Liquid's operational security and could shift perception of Layer 2 custody risk across the ecosystem.
For Builders
The incident underscores the importance of security audits and node-upgrade coordination for sidechain and federated consensus systems.
This article is for information only and is not financial advice. Read the full disclaimer.
