- The party controlling the bitcoin withdrawn from Liquid Network returned 3,400 BTC, worth about $268 million, to the federation address.
- About 598.5 BTC, worth roughly $47 million, remains at an address linked to the incident.
- Blockstream said updated software has been deployed, but Liquid Network remains suspended as federation members prepare a coordinated restart.
The party controlling the bitcoin withdrawn from Liquid Network returned 3,400 BTC, worth about $268 million, after Blockstream reported fixing a vulnerability on the bridge nodes. The transfer returned about 85% of the funds under the party’s control, although roughly 598.5 BTC remains and Liquid Network has not resumed normal operations.
On Sept. 6, 2026, about 4,000 BTC, worth roughly $320 million, was withdrawn from the Liquid Network federation wallet. The project team said hackers obtained the funds through the SideSwap PAK mechanism but found no evidence that keys had been compromised.
SideSwap later said the L-BTC used for the peg-out appeared because of a bug in the Elements software.
The party that received the funds called itself “ethical hackers” and began communicating with Blockstream through on-chain messages. The party said it was prepared to return most of the assets after the vulnerability was fixed and the nodes were updated.
Blockstream subsequently sent a signed PGP message on-chain stating that the bridge nodes had been fixed and that the funds could be returned safely. Soon afterward, the 3,400 BTC transaction to the federation wallet was confirmed in block 965,950.
About 598.5 BTC, worth roughly $47 million, remains at an address linked to the incident. As of the source article’s writing, there was no public confirmation that the remaining assets represented an agreed reward for discovering the vulnerability.
Liquid Network remains suspended
After the incident, the Liquid Network team announced that it had taken the bridge nodes offline. That made new transactions impossible and effectively halted the sidechain. Exchanges were also advised to suspend L-BTC deposits and withdrawals.
Despite the return of most of the bitcoin, the network has not resumed normal operations. Blockstream said in a recent post that updated software had been deployed and that federation members were preparing Liquid Network for a coordinated restart.
The team said it was continuing to work on additional measures to strengthen the network’s security. No timetable has been announced for fully restoring Liquid Network.
Source: Incrypted
