Bitcoin · Lombard Finance · Decrypt
Liquid Network Restores Full Bitcoin Backing Two Months After $320 million Exploit
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The Liquid Network's Bitcoin reserves have been fully restored, two months after self-described white-hat hackers drained most of them, the Liquid Federation said on Monday.
Key facts
- On September 6, purported white-hat hackers withdrew about 4,000 BTC, then worth around $320 million, from Liquid's federation wallet, communicating with Blockstream through PGP-signed messages
- The next day, they returned 3,400 BTC, worth about $269 million, after Blockstream said Liquid's bridge nodes had been patched, but kept roughly 598 BTC
- The Liquid Federation is pleased to announce that the network’s bitcoin reserves have been fully restored, reestablishing 1:1 BTC backing for all LBTC
- Blockstream CEO Adam Back, whose company develops the technology behind Liquid, posted a screenshot of the network's dashboard showing assets matching liabilities at 100%, with a reserve deficit
Summary
The Liquid Federation said the sidechain's Bitcoin reserves have been fully restored, reestablishing 1:1 backing for all LBTC after a September exploit. Purported white-hat hackers withdrew about 4,000 BTC from the federation wallet in September, returning 3,400 BTC but keeping around 598 BTC. Back said key systems have been hardened and audited, and urged developers to treat AI-suggested fixes "with suspicion. The federation said it had reestablished 1:1 Bitcoin backing for all LBTC, the token that represents Bitcoin on Liquid.