Liquid Network Hackers Demand Fix Before Returning $320 Million

A group of hackers has withdrawn approximately $320 million from Blockstream's Liquid Network, leaving it facing a software vulnerability and a significant hole in its reserves.

The hackers, described as 'purported white-hat hackers,' claim they will return most of the funds once Liquid fixes the underlying vulnerability. The negotiation is unfolding publicly through messages embedded in Bitcoin transactions on the blockchain.

The hack occurred on September 6, with roughly 4,000 bitcoin being withdrawn from Liquid's federation wallet. Blockstream attributed the incident to a software bug in Elements, the software underlying Liquid.