{"id":241869,"date":"2026-10-20T21:10:58","date_gmt":"2026-10-20T21:10:58","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=241869"},"modified":"2026-10-20T21:10:58","modified_gmt":"2026-10-20T21:10:58","slug":"liquid-network-announces-final-stages-of-recovery-following-massive-hack","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=241869","title":{"rendered":"Liquid Network Announces Final Stages of Recovery Following Massive Hack\u00a0"},"content":{"rendered":"

Bitcoin Magazine<\/a><\/p>\n

Liquid Network Announces Final Stages of Recovery Following Massive Hack\u00a0<\/a><\/p>\n

<\/div>\n

The Liquid Network on Tuesday said that things were up and running again, over one month after hackers stole<\/a> 4,000 bitcoin, worth about $320 million at the time, from the network\u2019s federation wallet before returning most of it in a \u201cwhite hat\u201d operation.<\/p>\n

Writing in a blog post, the Liquid Network said<\/a> that it was entering \u201cthe final stages of recovery with enhanced security.\u201d\u00a0<\/p>\n

Hackers in September stole 4,000 bitcoins from the federation wallet that backs the Blockstream sidechain. Blockstream was able to negotiate to get back most of the funds.\u00a0<\/p>\n

\n

LBTC:BTC swaps full service again. swap @liquid_btc<\/a> to\/from mainchain BTC on @side_swap<\/a>. swap @liquid_btc<\/a> to\/from lightning on @AquaBitcoin<\/a>. https:\/\/t.co\/csslFIIRAE<\/a><\/p>\n

\u2014 Adam Back (@adam3us) October 20, 2026<\/a>\n<\/p><\/div>\n

\u201cThe final phase of restoration involves reestablishing the network\u2019s full 1:1 bitcoin backing, followed by the controlled reactivation of Federation peg-outs for authorized PAK key holders,\u201d the Liquid blog post read.\u00a0<\/p>\n

\u201cThe Federation, Blockstream, and independent security experts have made substantial progress toward this objective, with the necessary technical infrastructure and safeguards now in place.\u201d<\/p>\n

The post added that it had introduced phased swaps again. Blockstream CEO Adam Back wrote<\/a> on X on Tuesday that swaps were working again.\u00a0<\/p>\n

Liquid is a layer-2 created by Blockstream that allows users to quickly move assets backed 1:1 with bitcoin. People can swap stablecoins for bitcoin and bitcoin on the Lightning Network on apps that support the Liquid Network.\u00a0<\/p>\n

Hackers were able to get 4,000 bitcoins by exploiting an inflation bug on the Liquid sidechain to create over 4,000 LBTC \u2014 a token supposedly backed by bitcoin \u2014 that did not exist before and cash them out for real on-chain BTC.\u00a0<\/p>\n

The hackers claimed to be white hat hackers who then had an exchange<\/a> with Blockstream via messages written into Bitcoin blocks. Though critics argue they were not so \u2018white\u2019 since they kept 15% of the stolen funds, worth millions.<\/p>\n

In one message, the hackers slammed<\/a> Blockstream as \u201cdelusional, greedy, and arrogant,\u201d and threatened to reveal all of Blockstream\u2019s encrypted messages in the exchange unless the company paid the hackers 10% of the bitcoins as an official bounty.\u00a0<\/p>\n

\u201cYou SHALL pay 10% using your own money as bug bounty or you will cause all your holders a 15% loss for your irresponsibility and stinginess,\u201d the message read.\u00a0<\/p>\n

The hackers are still holding onto around 600 bitcoins \u2014 or 15% of the total funds \u2014 worth close to $50 million at today\u2019s prices as per the latest public knowledge.\u00a0<\/p>\n

It is not clear if Blockstream reached a settlement with the hackers in private.<\/p>\n

This post Liquid Network Announces Final Stages of Recovery Following Massive Hack\u00a0<\/a> first appeared on Bitcoin Magazine<\/a> and is written by Mathew Di Salvo<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Bitcoin Magazine Liquid Network Announces Final Stages of Recovery Following Massive Hack\u00a0 The Liquid Network on Tuesday said that things were up and running again, over one month after hackers stole 4,000 bitcoin, worth about $320 million at the time, from the network\u2019s federation wallet before returning most of it in a \u201cwhite hat\u201d operation. […]<\/p>\n","protected":false},"author":0,"featured_media":241870,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-241869","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/241869"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=241869"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/241869\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/241870"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=241869"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=241869"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=241869"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}