Blockstream Refuses to Pay Bug Bounty Demanded by Liquid Network Attacker
The Blockstream has issued an ultimatum to the attacker of the Liquid Network, demanding that they return approximately 600 BTC. The company refuses to pay a 10% 'bug bounty' requested by the attacker, viewing it as extortion rather than responsible disclosure.
The attack occurred when a vulnerability in the Elements software was exploited to create around 4000 LBTC (Liquid Bitcoin) without sufficient backing from real Bitcoin. Some of this unbacked LBTC was then exchanged for real Bitcoin through the SideSwap platform.
The Blockstream has stated that it will not pay out the requested bounty, viewing it as a form of larceny rather than responsible disclosure. The company has also announced that it will work with law enforcement, exchanges, and blockchain analytics tools to track down the attacker and recover the stolen funds.