Liquid Network Hackers Return $270M After $320M Bitcoin Heist
The Liquid Network has resumed block production after a massive Bitcoin extraction that revealed a critical vulnerability in its underlying codebase.
A group of self-identified white-hat hackers extracted approximately 4,000 Bitcoin valued at $320 million from the network on September 6. The attackers exploited a weakness in the proof-verification cache mechanism, allowing them to mint L-BTC tokens without depositing the corresponding amount of actual Bitcoin.
The Liquid Network deployed an emergency software update, Elements v23.3.4, which modifies the cache key storage methodology used during range proof validation and eliminates the vulnerability. Following Blockstream's verification that its bridge infrastructure had been successfully patched, the attackers returned 3,400 BTC, representing approximately $270 million in value.
Around 598 BTC, valued at around $46 million, remains with the attackers, with no clear timeline for recovery. Charles Guillemet, Chief Technology Officer at Ledger, has questioned the white-hat characterization of the actors, suggesting that retaining this amount resembles extortion rather than responsible disclosure practices and security bounty arrangements.