Blockstream Refused to Pay the Liquid Hackers a Ransom for the Remaining 598 BTC

• Blockstream refused to pay a reward to the party that withdrew about 4,000 BTC from the Liquid Network.
• The attackers returned 3,400 BTC, but about 598 BTC remains under their control.
• The company called the withholding of funds theft and threatened to involve law enforcement.

Blockstream said it will not pay a ransom to recover the remaining bitcoin withdrawn in the Liquid Network incident. The company published the statement on X.

“Taking assets without permission and refusing to return them is a crime, not responsible vulnerability disclosure. This is not white hat activity [so-called ethical hackers]. This is theft,” Blockstream said.

According to the company, it negotiated with those involved in the incident “in good faith,” expecting to recover users’ funds, but it does not intend to agree to their demands.

Earlier, a party calling itself white hats demanded a reward from Blockstream equal to 10% of the withdrawn amount, to be paid from the company’s own funds. Otherwise, according to the published correspondence, Liquid Network asset holders could have faced losses of around 15%.

If the remaining funds are not returned voluntarily, Blockstream intends to work with law enforcement, cryptocurrency exchanges, service providers, and blockchain forensics specialists. The company stressed that transactions on the Bitcoin network are public, so incident-related transactions and evidence will remain preserved on the blockchain.

As a reminder, on September 6, about 4,000 BTC worth roughly $320 million was withdrawn from the Liquid Network’s reserves. The cause was a vulnerability in the Elements software that made it possible to create around 4,000 L-BTC without corresponding bitcoin backing. Those tokens were then used to withdraw real bitcoin via the SideSwap service.

After the vulnerability was fixed, the party controlling the funds returned 3,400 BTC. About 598.5 BTC, valued at roughly $47 million, remained at an address linked to them.

The return of most of the funds came after Blockstream confirmed that patches had been deployed on network nodes.

In the wake of the incident, Liquid Network temporarily halted operations. On September 10, the network began a phased recovery and resumed block production after deploying an emergency update, but Bitcoin deposits and withdrawals remained suspended for some time.

Сообщение Blockstream Refused to Pay the Liquid Hackers a Ransom for the Remaining 598 BTC появились сначала на INCRYPTED.