Blockstream Refuses to Concede as L-BTC Peg-Outs Remain Frozen

It's been 11 days since hackers stole nearly 4,000 BTC from the Liquid Network. The 'white hat' attackers returned 3,400 BTC and a lot of onchain bickering followed, but L-BTC to BTC peg-outs are still not functional on Liquid.

The hackers still hold 598.50 BTC valued at over $45 million. Blockstream says the L-BTC 1:1 peg is covered, but it has refused to pay for the remaining coins and wants the 598.50 BTC returned.

Blockstream founder Adam Back posted on X, insisting that the 1:1 L-BTC to BTC peg will be covered. He told holders not to dump L-BTC over-the-counter at a discount. However, there has been no official 'peg-out is live' post since then.

The hackers continue to send OP_RETURN messages onchain, including encrypted messages that cannot be seen unless you have the private key. The wallet has also been hit with poisoning attacks, where scammers generate a fraudulent wallet address that visually mirrors the first and last characters of a legitimate address held by the owner.