Blockstream Rejects Ransom Demand From Liquid Hackers
Key Takeaways
- •The hackers demanded a 10% bounty from Blockstream and warned of a 15% loss for Liquid holders.
- •Approximately 4,000 BTC was withdrawn from Liquid’s federation wallet, with about 598 BTC still unreturned after 3,400 BTC was recovered.
- •Blockstream said it would not meet the hackers’ demands and urged them to voluntarily return the remaining Bitcoin.
- •The company plans to work with law enforcement, exchanges, service providers and forensic specialists to trace the outstanding assets.
- •Liquid resumed block production after emergency updates, but normal transactions and Bitcoin transfers remain paused.
Bitcoin infrastructure company Blockstream said it will not pay a ransom to recover funds still held by hackers who targeted the Liquid Network.
“Taking assets without authorization and withholding their return is a crime, not responsible disclosure,” Blockstream said Friday. “It is not white-hat activity. It is theft.” The company said it had engaged with the hackers in good faith to recover users’ funds but would not accept their demands.
The hackers demanded that Blockstream pay a 10% bounty from its own funds in an onchain message shared Wednesday by Jan3 CEO and former Blockstream chief strategy officer Samson Mow: https://x.com/Excellion/status/2097785361342845125. They warned that Liquid holders would otherwise face a 15% loss.
Blockstream urged the hackers to return the remaining Bitcoin voluntarily. If they do not, the company said it will work with law enforcement, exchanges, service providers and forensic specialists to trace the assets and identify those responsible. Blockstream’s statement was posted on X: https://x.com/Blockstream/status/2098281867908690394.
Liquid, a Bitcoin sidechain, paused operations on Sept. 6 after self-described white-hat hackers withdrew about 4,000 Bitcoin, then worth approximately $320 million, from its federation wallet.
The actors later returned 3,400 BTC after Blockstream said the affected bridge nodes had been patched, leaving about 598 BTC outstanding.
Liquid resumed block production Thursday, producing empty blocks after emergency software updates. The resumption of block production did not restore normal network use: transactions and Bitcoin transfers into and out of the network remained suspended.
