Blockstream is negotiating to recover 598.5 BTC after a hack on the Liquid Network, leaving $47 million still missing.
Negotiations Underway for Missing Bitcoin
Blockstream is in discussions to recover approximately 598.5 BTC, valued at around $47 million, after a significant hack on the Liquid Network led to the loss of about $320 million. The hackers, who initially withdrew nearly 4,000 BTC, returned 3,400 BTC on Monday, leaving a small portion unreturned.
The incident was facilitated by a vulnerability in Liquid’s Elements software, which allowed unsupported L-BTC to be exchanged for reserve Bitcoin. This flaw enabled the hackers to exploit the system before the withdrawal could be stopped.
Liquid confirmed that these negotiations with the hackers are ongoing, and while they have not disclosed specific details or a timeline for recovery, they are hopeful for a resolution. The company reassured users that other tokens, such as USDT, were not affected by the breach.
Impact of the Hack
Following the exploit, Liquid’s reserves drastically decreased from approximately 4,205 BTC to just 197 BTC. Despite the severity of the situation, Liquid maintains that its peg-out mechanism, which manages withdrawals, functioned correctly and that the vulnerability was not due to compromised private keys.
The attackers claimed to be white-hat security researchers, but skepticism remains regarding their intentions, especially as they still hold 600 BTC. Charles Guillemet, CTO of Ledger, expressed doubts about the legitimacy of their actions, suggesting that it resembled extortion rather than ethical hacking.
In response to the breach, Blockstream is preparing an emergency update to address the vulnerabilities. This follows a recent patch applied to their bridge nodes. Liquid’s primary focus now is on securing the remaining funds and restoring normal operations as quickly as possible.
