Liquid Network There has been phased progress in the security incident. Approximately 4,000 BTC were withdrawn, and 3,400 of these BTC have been returned to the federated wallet of that sidechain, amounting to about 269.2 million US dollars at the price mentioned in the text, which is approximately 85% of the funds involved in this incident. However, there are still about 598.5 BTC remaining in the addresses related to this withdrawal, valued at around 47 million US dollars.
The incident began with the SideSwap peg-out operation.
This incident occurred on Sunday. A customer sent 4,000 L-BTC to the peg-out service of SideSwap at that time, and subsequently, an equivalent number of BTC were transferred out. Afterwards, the individuals involved claimed to be "white-hat hackers" through information attached to their Bitcoin transactions, stating that their actions were intended to expose security issues.
After the incident occurred, Liquid shut down the bridge node and requested that the exchange suspend the recharge and withdrawal of L-BTC to prevent further risk expansion.
Blockstream sends a signed message
Before the funds were returned, Blockstream communicated with the relevant addresses through Bitcoin transaction information. As the developer of the Liquid sidechain, Blockstream subsequently sent a signed message stating that the bridge node had been repaired and that the funds could be safely returned.
After this message is sent, the relevant address will transfer 3,400 BTC back to the Liquid Federation address. Previously, the other party indicated their willingness to return “most” of the bitcoins, but did not publicly explain why they retained the remaining portion.
The whereabouts of nearly 600 BTC remain unclear.
Although most of the funds have been returned, Liquid still faces several unresolved issues: whether the remaining BTC will continue to be repaid, how to deal with the reserve shortfall of L-BTC, and when the sidechain and peg services will return to normal.
Ledger The Chief Technology Officer Charles Guillemet expresses doubts about the so-called "white hat" behavior. He stated on X that if this is not a pre-agreed on-chain reward, and the other party still retains around 600 BTC, then it seems more like coercion rather than typical white hat behavior.
As of press time, Blockstream has not made any further responses to the media on this matter, and Liquid has also not announced a specific timeline for resuming normal operations.
