Liquid Recovers 3,400 BTC but 598 Remain Outstanding

The Liquid Network, a Bitcoin Layer 2 solution, has recovered 3,400 BTC from around 4,000 BTC withdrawn during a security incident on Sunday.

The funds were returned after Blockstream confirmed that the affected bridge nodes had been patched. This is in line with a warning from the supposed white-hat hackers who claimed they would only return the funds once the network issue was fixed and all nodes were updated.

Around 598 BTC remains outstanding, but Blockstream is still working to resolve the situation. The network remains paused as Liquid's technical provider and Federation members carry out further fixes and security improvements.

The incident saw around $320 million worth of BTC withdrawn from Liquid's Federation wallet using the SideSwap PAK. Exchanges had paused or prepared to pause LBTC deposits and withdrawals, while Liquid disabled its bridge nodes and halted the sidechain.