Liquid Receives $270M in Partial Repayment After Security Incident
The Liquid Federation wallet received a significant return of Bitcoin funds after a partial repayment tied to a security incident involving the network's reserves. According to on-chain activity, approximately 3,400 BTC ($270 million) was transferred back to the federation's wallet address. This follows comments from JAN3 CEO and former Blockstream executive Samson Mow, who stated that Blockstream confirmed patch work on affected bridge nodes had been completed.
The security incident occurred on Sunday, with roughly $320 million withdrawn from the Bitcoin sidechain's reserve. The return of 85% of the withdrawn funds restores much of the removed collateral for L-BTC issued against Bitcoin held by the federation. Blockstream continues direct engagement with the parties involved and has deployed updated software.
Liquid remains paused, with users advised not to send Bitcoin to peg-in addresses until a confirmed restart. Mow stated that no other user step is otherwise required beyond this guidance. The incident highlights how Liquid bridges operational decisions to Bitcoin-side verification and raises questions about the 'white-hat' label given to the actors involved.
Charles Guillemet, Ledger's chief technology officer, questioned the 'white-hat' label, suggesting that the arrangement could resemble extortion rather than conventional vulnerability disclosure. The partial repayment has not fully ended debate about intent and legitimacy.