Blockstream Negotiates with Hackers Over $13M Bounty Demand
The Liquid network, a federated sidechain for issuing and backing Bitcoin-pegged assets, suffered a significant security breach on September 6, 2026. Attackers extracted nearly 4,000 BTC from the network's reserves before returning 3,400 BTC two days later. The group retained 598.5 BTC and has been in direct communication with Blockstream leadership through encrypted messaging.
The hackers have demanded a 10% bounty using Blockstream's corporate funds, warning that refusal could result in a 15% loss for Liquid users. This demand has sparked controversy in the industry, with analysts questioning the legitimacy of the attackers' claims and the precedent set by coercing bounties.
Blockstream has negotiated with the group to recover the remaining BTC, but the outcome remains uncertain. The company's cybersecurity budget allocations have also been called into question, with the hackers claiming that Blockstream allocated only $1.5 million or less to protect its systems.