Liquid Network Hackers Return Most Stolen Funds, Keep Millions

Hackers behind the recent $269 million heist on Blockstream's Liquid Network returned approximately 3,400 BTC worth around $269 million to the federation wallet, but kept 600 BTC valued at roughly $47 million.

The withdrawal occurred when the hackers exploited a bug in Elements, the open-source software that runs the sidechain, allowing them to create L-BTC tokens not backed by any bitcoin. The network's custody model worked as designed, and no private key was compromised.

Liquid halted new transactions, disabled its bridge nodes, and asked exchanges to suspend L-BTC deposits and withdrawals following the incident. Total value locked on the network stands at around $5 billion across various assets, including tokenized US Treasury bills and corporate debt issued through federation members.