Blockstream Rejects Hacker's $50M Demand, Fueling Debate Over Bounty Payments

Blockstream has refused to pay a hacker nearly $50 million in Bitcoin after they returned around 85% of the stolen funds.

The hacker exploited a vulnerability on September 6, allowing them to create and withdraw 4,000 unbacked L-BTC and roughly 3,996 real BTC through SideSwap.

The attacker then demanded a 10% bounty paid from Blockstream's own funds, threatening that otherwise holders could bear a 15% shortfall. However, Blockstream rejected the demand on September 11, stating it would pursue the remaining funds through law enforcement and forensic specialists if they are not voluntarily returned.

Lorenzo Romagnoli, co-founder of USDT0, argued that Blockstream had already received an unusually favorable outcome, with some suggesting that paying a substantial bounty could create a perverse incentive for future hackers to cooperate.