Blockstream Rejects Ransom Demand for Stolen Liquid Network Bitcoin
Blockstream has announced that it will not pay a ransom for the nearly 600 Bitcoin (BTC) still missing from the Liquid Network after an exploit. The company views the withholding of coins as theft, rather than white-hat security work.
The exploit occurred on September 6, when hackers drained around 4,000 BTC from a federation wallet holding roughly 4,200 BTC, worth approximately $320 million at the time. Blockstream had initially attempted to negotiate the return of the stolen coins, but it has now rejected the claim that the operation was white-hat security work.
In a statement on X, Blockstream said that withholding the coins is 'a crime, not responsible disclosure.' The company expressed concerns that submitting to the hackers' demands for a 10% fee on the stolen Bitcoin would set a bad precedent for open-source software development.
Blockstream has stated that if the remaining Bitcoin is not returned voluntarily, it will work with law enforcement, exchanges, service providers, and forensic specialists to trace the funds and apprehend the hackers. Liquid Network resumed block production on September 11, but peg operations remain suspended while the BTC-to-L-BTC reserve is restored.