White Hat Hackers Return $270M Worth of Bitcoin to Liquid Sidechain
A recent security incident on Liquid's Bitcoin sidechain resulted in hackers withdrawing approximately $320 million from its reserves. The affected bridge nodes had a bug in Elements, the open-source software underpinning Liquid, which allowed the unauthorized transfer of funds.
However, the situation took a positive turn when purported white-hat hackers returned 3,400 Bitcoin worth around $270 million to the Liquid Federation wallet. This represents about 85% of the withdrawn amount, restoring much of the backing removed in the incident.
The return was made possible after Blockstream confirmed that the affected bridge nodes had been patched and updated software had been deployed. The actors who returned the funds claimed they were white hats, but their motivations have been questioned by some, with Ledger's chief technology officer Charles Guillemet describing it as 'more like extortion than white-hat hacking'.
The network remains paused while Blockstream and federation members make further fixes and security improvements. Users are advised not to send Bitcoin to Liquid peg-in addresses until the network's restart is confirmed.