Liquid Sidechain Hacked: White-Hat Hackers Return $270M in Bitcoin

A recent security incident on the Liquid sidechain led to hackers withdrawing about $320 million in Bitcoin from its reserves. The affected bridge nodes were later patched by Blockstream, and this prompted a group of purported 'white-hat' hackers to return 3,400 BTC worth around $270 million to the federation's wallet.

The return follows an onchain negotiation between Blockstream and the actors, who identified themselves as white hats. They agreed to return most of the funds once the vulnerability was fixed and every node had installed the patch.

About 598 BTC remains outstanding, with Liquid remaining paused while further fixes and security improvements are made. Users have been advised not to send Bitcoin to Liquid peg-in addresses until the network's restart is confirmed.