Blockstream Rejects Ransom Demand from Liquid Hackers

Blockstream has refused to pay a ransom to hackers who have held nearly $600 million in Bitcoin. The hackers withdrew about 4,000 BTC from Liquid's federation wallet on September 6, leaving about 598 BTC outstanding. Blockstream claims that the hackers' actions constitute theft and not responsible disclosure. The company had engaged with the hackers in good faith but refused to accept their demands for a 10% bounty from its own funds.

The hackers warned that Liquid holders would face a 15% loss if they did not pay the ransom, prompting Blockstream to urge them to return the remaining Bitcoin voluntarily. If the funds are not returned, Blockstream will work with law enforcement and exchanges to recover them. The company emphasizes that it views the situation as theft rather than white-hat activity.

Liquid resumed block production on Thursday after emergency software updates but transactions and Bitcoin transfers remain suspended.