Red Team Blames Blockstream for Ignoring Vulnerability Warnings
The Bitcoin Red Team, a group of volunteer security developers, claimed that Blockstream ignored their warnings about a vulnerability in the Liquid protocol before the recent hack. The team alleged that they had already disclosed the bug to Blockstream, which allowed a white-hat hacker to steal nearly 4,000 BTC.
According to Calle, co-lead of the Bitcoin Red Team, Blockstream's founder and CEO Adam Back inaccurately described the bug as an AI-found non-critical issue that was fixed incorrectly. Calle stated that Blockstream had selectively mentioned patches without providing a complete history of acknowledgement.
Blockstream denied ignoring security warnings, attributing the vulnerability to the flawed AI bug fix. The company's former CSO Samson Mow defended Blockstream's actions, saying that no emails were ignored and that the Red Team's insinuations diminished their professionalism.
The hack resulted in nearly 600 BTC still missing from the Liquid federation wallets, with peg-outs remaining disabled as a precautionary measure. The white-hat hacker controls the remaining BTC, requiring a third-party deposit to ensure a 1:1 peg between BTC and L-BTC, the native liquid asset.