White-Hat Hacker Returns $268M in Bitcoin After Exploit
A white-hat hacker exploited a vulnerability in the Liquid Federation's bridge nodes and returned nearly $268 million in Bitcoin after patching was confirmed. The actor initially took around 4,000 BTC but sent back 3,400 of it to the federation. This represents most of the stolen funds.
The hack occurred on September 6 when a large withdrawal was made from a Liquid Federation wallet via SideSwap's Peg-out Authorization Key (PAK). The PAK and other federation keys were not compromised in the exploit, according to Liquid. Blockstream later identified an issue with Elements, the open-source software powering Liquid, as the source of the vulnerability.
The white-hat actor requested confirmation that the affected bridge nodes had been patched before returning the funds, which was confirmed by Blockstream through on-chain messages. The company told the hacker 'Bridge nodes are patched, safe to return the funds.'