Hackers Return $270M in BTC After Swiping $320 Million from Liquid Network

4,000 BTC was withdrawn from Liquid Network in an incident that raised concerns about security flaws. The actors behind the withdrawal, who claimed to be 'white hat hackers', returned 3,400 BTC worth approximately $269.2 million to the federation wallet. This leaves around 598.5 BTC still outstanding, valued at roughly $47 million.

According to Charles Guillemet, Ledger's Chief Technology Officer, the return of funds does not necessarily justify the actors' white-hat claim. He questioned whether it was a negotiated reward or extortion under an encrypted contract.

The incident began when a customer sent 4,000 L-BTC to SideSwap's peg-out service. The 'white hats' then communicated with Blockstream and Liquid through Bitcoin transactions, requesting that the bridge nodes be patched before they would return the funds.

Blockstream responded by sending a signed message stating that the bridge nodes had been patched, which led to the return of 3,400 BTC. However, Liquid has not announced when normal operations will resume or how it will cover any remaining gap in L-BTC backing.