Liquid Network Hacker Returns Over 3,400 Bitcoin After Security Flaw Patched

An attacker who drained about 4,000 Bitcoin from the Liquid Network, a Bitcoin sidechain, has returned approximately 85% of the stolen funds after a security flaw was patched.

The incident began on September 6 when around 4,000 BTC was withdrawn from a Liquid Federation wallet. The attacker then sent 3,400 BTC back to a Liquid Federation address, leaving their wallet with about 598.5 BTC worth approximately $47.3 million.

Liquid's technology provider, Blockstream, determined that the LBTC used in the attack had been minted through a bug in Elements, the software underlying Liquid. As a result, exchanges have suspended LBTC deposits and withdrawals, while SideSwap has kept swaps and peg-in and peg-out services suspended until the network resumes.