The Liquid network is going through a stage of its security incident. After the withdrawal of thousands of bitcoins, Blockstream is now refusing any ransom demands. The company says it wants to recover the remaining funds without paying a financial bonus. She plans to work with law enforcement, exchange platforms and digital forensics experts. Liquid has resumed block production, but is keeping bitcoin transfers suspended.
In brief
- Blockstream refuses to pay the ransom demanded by the Liquid hackers.
- The attackers withdrew around 4,000 BTC from the federated wallet.
- 3,400 BTC was returned, leaving nearly 598 BTC still outstanding.
- Blockstream wants to trace the remaining funds with law enforcement and experts.
Blockstream rejects hackers’ request
Blockstream has indicated that it will not pay hackers to recover funds held by Liquide. The company believes that taking assets without authorization constitutes theft. She specifies that she spoke with the authors in order to promote restitution. However, she refuses their financial demands.
According to a message broadcast on Wednesday on the blockchain by Samson Mow, the pirates are demanding a 10% bonus taken from its own funds. They claim that a refusal would result in a 15% loss for Liquid holders. This request comes after the initial withdrawal of around 4,000 bitcoin from the federated wallet. A significant portion of assets have already regained control of the network.
On September 6, Liquid suspended operations following this attack. The hackers, who identified themselves as “white hats,” withdrew around 4,000 BTC, worth nearly $320 million. Subsequently, they returned 3,400 BTC after fixes were announced for the affected bridge nodes. Around 598 BTC still remains outstanding at this point.
The company prepares the follow-up of the remaining funds
Faced with this situation, the company asks the hackers to return the bitcoins still held. The company announced cooperation with law enforcement to continue the search. Exchanges, service providers and digital forensic specialists will also participate in asset tracking. This approach should make it possible to trace financial movements and identify those responsible.
Meanwhile, Liquid resumed block production on Thursday following emergency software updates. The network is currently producing empty blocks, while transactions remain suspended. Bitcoin transfers to and from Liquid also remain disrupted. This recovery does not yet mean a complete return of operations.
What happens next will depend on the return of funds and tracking of assets. Blockstream will have to coordinate the different actors involved, while investigators will seek to trace the BTCs concerned. This procedure will determine the next steps for Liquid. For now, Blockstream maintains its refusal to pay, and the network continues its operations under restrictions.
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