Blockstream Demands Return of Stolen Bitcoin After Liquid Network Hack

Blockstream, a prominent Bitcoin infrastructure firm, has taken a firm stance against hackers who exploited a vulnerability in its Liquid network, resulting in the theft of approximately 4,000 bitcoins. In a recent post on X, the company stated that the hackers have until a specified deadline to return the stolen funds before Blockstream engages law enforcement.

Following the hack on September 6, white-hat hackers managed to recover around 3,400 bitcoins after Blockstream patched the affected nodes. However, the attackers retained 598.5 bitcoins, valued at over $46 million, and demanded a ransom as a bounty for their return. Blockstream has categorically refused to pay this ransom, asserting that taking assets without authorization constitutes theft, not responsible disclosure.

In their communications, the hackers criticized Blockstream, labeling them as “delusional, greedy, and arrogant.” They threatened to disclose encrypted messages exchanged during the negotiation unless Blockstream agreed to their demands. Blockstream has emphasized that it will not establish a precedent where developers of open-source software are coerced into paying ransom demands.

Blockstream's decision to reject the ransom has sparked a broader debate within the crypto community regarding the ethics and implications of compensating hackers who return stolen funds. Some experts argue that refusing to pay may deter future attacks, while others caution that it could discourage hackers from returning any stolen assets.

As the situation develops, Blockstream is committed to working with law enforcement, exchanges, and forensic specialists to trace and recover the remaining stolen bitcoins. The company has reassured its users that it will not abandon them in the pursuit of the stolen assets.