Liquid Network Receives 3,400 BTC Back from White Hat Hackers After Security Fix

The Liquid Network, a Bitcoin sidechain developed by Blockstream, has successfully recovered 3,400 BTC from white hat hackers who had withdrawn nearly 4,000 BTC over the weekend. The return of funds occurred after the hackers demanded that Blockstream address a security flaw in the network.

The hackers, who retained approximately 598 BTC as a finder’s fee, communicated their intentions through a series of on-chain messages. They initially withdrew the funds to a new address, bypassing the usual requirement for sign-off from multiple companies that manage the Liquid Network. After the breach, Blockstream responded by patching the bridge and confirming the safety of the funds for return.

In a series of transactions, the hackers sent back the majority of the stolen Bitcoin, with the return transaction confirmed at 16:09 UTC on September 7. The remaining 598 BTC, valued at around $47 million, has raised questions about the nature of the hackers' actions, with some experts suggesting it resembles extortion rather than ethical hacking.

Blockstream has not publicly commented on the situation since the return of the funds, and the dialogue between the parties involved continues to unfold on-chain.