Blockstream Refuses Ransom for Return of $47M in Bitcoin from Liquid Hack
What happened: Blockstream confirmed that hackers exploited a software bug in the Liquid Network on September 6, draining around 4,000 BTC (about $320 million).
What happened: Blockstream confirmed that hackers exploited a software bug in the Liquid Network on September 6, draining around 4,000 BTC (about $320 million). After a patch was deployed, 3,400 BTC were returned, but 598.5 BTC (~$47 million) remain outstanding. The attackers, initially presenting as white-hat hackers, demanded a 10% bounty from Blockstream and threatened to publish sensitive data if refused. Blockstream has publicly rejected the ransom demand, labeling the act as theft and pledging to involve law enforcement and forensic specialists.
Why it matters: The incident underscores the persistent vulnerabilities in cross-chain and federated blockchain systems, even among established players. Blockstream's refusal to negotiate with the hackers sets a precedent for how major crypto infrastructure providers may handle extortion attempts, but also raises questions about the effectiveness of public negotiation and the risks of transparency in such crises. The return of most funds suggests some deterrence, but the outstanding amount remains a concern for affected users.